Synlait Milk Ltd. · NZX:SML
Synlait Milk — Shareholder Meeting (September 2024)
33 slides from Synlait Milk's shareholder meeting presentation, Sep 18, 2024
Slide 1: Welcome to Synlait's Special Shareholders' Meeting
WELCOME TO SYNLAIT’S SPECIAL SHAREHOLDERS’ MEETING Wednesday 18 September 2024
Slide 2: Voting Online
VOTING ONLINE • Voting is now open. • To vote, click the vote tab and select your preferred option. Once your vote is cast, a tick will appear. • There is no submit or send button. Your selection is automatically recorded, and you can change it until voting closes. PAGE 2 SPECIAL SHAREHOLDERS’ MEETI
Slide 3: Asking a Question Online
ASKING A QUESTION ONLINE • To ask a question, click on the Q&A icon. • Click on the box, type your question, and press submit. • Your question will be asked at the appropriate part of the meeting. • Please ensure questions are concise, clear, and relevant to the meeting. PAGE 3 SPECIAL SHAREHOLDERS’
Slide 4: Need Help?
NEED HELP? • Use the Q&A tab to message a Computershare representative. • Check the virtual meeting guide issued with the Notice of Meeting or on Synlait’s website. • Call the Computershare team on +64 9 488 8777. PAGE 4 SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024
Slide 5: Chair Address
CHAIR ADDRESS George Adams Chair PAGE 5 SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024
Slide 6: Today's Agenda
TODAY’S AGENDA • Chair Address • Bright Dairy Appointed Director Address • Resolution & Voting PAGE 6 SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024
Slide 7: Current Position
CURRENT POSITION Unsustainable $180 million Bank facility 1,400+ 200+ farmer debt levels due to retail due for employees suppliers (circa $560 bond holders repayment million) in December on 1 October North Island 2024 2024 investment ($450 million) Underpinned by state-of-the-art facilities which ha
Slide 8: Reducing Debt to a Sustainable Level: A Two Step Plan
REDUCING DEBT TO A SUSTAINABLE LEVEL A TWO STEP PLAN PROPOSED EQUITY RAISE 1 SHAREHOLDER LOAN 2 AND BANK REFINANCING Timing: July 2024 Proceeds: approximately $217.8 million Proceeds: $130 million Use of proceeds: repaying a portion of the outstanding bank debt Use of proceeds: repayment of bank deb
Slide 9: Business Recovery Progress Since July
BUSINESS RECOVERY PROGRESS SINCE JULY NORTH ISLAND SETTLEMENT WITH THE BANKING 1 STRATEGIC REVIEW 2 a2 MILK COMPANY 3 REFINANCING COMPLETED Pathway to profitability now Conditional agreement has been $450 million package agreed with in place. reached to end all disputes that new banking syndicate. w
Slide 10: Today Is a Critical Next Step
TODAY IS A CRITICAL NEXT STEP ORDINARY RESOLUTION 1 Bright Dairy placement PAGE 10 SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024
Slide 11: Today Is a Critical Next Step
TODAY IS A CRITICAL NEXT STEP ORDINARY RESOLUTION 1 ORDINARY RESOLUTION 2 Bright Dairy The a2 Milk Company placement placement and settlement PAGE 11 SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024
Slide 12: Today Is a Critical Next Step
TODAY IS A CRITICAL NEXT STEP ORDINARY RESOLUTION 1 ORDINARY RESOLUTION 2 Bright Dairy The a2 Milk Company placement placement and settlement + = The opportunity to support Synlait returning to sustainable profitability. Bank refinancing PAGE 12 SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024
Slide 13: Pathway to Today Led by Synlait's Independent Directors
PATHWAY TO TODAY LED BY SYNLAIT’S INDEPENDENT DIRECTORS George Adams Paul McGilvary Paul Washer Approach underpinned by Companies Act director duties, including to: • Act in good faith and in the best interests of the company • Exercise a duty of care • Trade sensibly PAGE 13 SPECIAL SHAREHOLDERS’ M
Slide 14: Future Options Analysis
FUTURE OPTIONS ANALYSIS RIGOROUS AND STRATEGIC ANALYSIS OF ALL OPTIONS Asset sales Ownership Alternative Equity raise Insolvency structures recapitalisation Receivership and voluntary administration PAGE 14 SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024
Slide 15: Optimal Offer Structure Driven By
OPTIMAL OFFER STRUCTURE DRIVEN BY • Tight timeframe and level of certainty required • High level of equity required (around three times market capitalisation) • High-risk investment requiring deep understanding of the company • Major shareholders commercially-driven to ensure Synlait’s future and su
Slide 16: The Alternative
THE ALTERNATIVE • There are no other proposals on the table. • If either of our ordinary resolutions are not passed, Synlait would likely need to cease trading and initiate a formal insolvency process unless it were to become clear that further support would be forthcoming from its banks. PAGE 16 SP
Slide 17: An Independent Assessment
AN INDEPENDENT ASSESSMENT Overall, Northington Partners concluded that: • on balance and having regard to all relevant factors, the merits of the Bright Dairy placement, The a2 Milk Company placement and The a2 Milk Company settlement outweigh the negative aspects and are in the best interests of ex
Slide 18: Next Steps
NEXT STEPS TODAY 30 SEPTEMBER 1 OCTOBER OCTOBER ONWARDS Special Shareholders’ Full year 2024 result Equity raise anticipated Areas of focus for the Meeting published: to occur, concurrently Board going forward • On track to meet with the refinancing • Farmer retention minimum adjusted of Synlait’s e
Slide 19: Bright Dairy Appointed Director Address
BRIGHT DAIRY APPOINTED DIRECTOR ADDRESS Julia Zhu PAGE 19 SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024
Slide 20: Bright Food Group Overview
BRIGHT FOOD GROUP OVERVIEW Bright Food Group is a comprehensive food industrial group, integrating modern agriculture, food processing and manufacturing, and city service. CHINESE A-SHARED OVERSEAS SCALE AND RATINGS 5 LISTED COMPANIES INVESTMENTS Investment Grade ~US$19bn >US$1bn by all ratings agen
Slide 21: Bright Dairy Overview
BRIGHT DAIRY OVERVIEW Bright Dairy & Food Co., Ltd. (Bright Dairy) is a leading high-end dairy product company in China, ensuring consistent high-quality products and services with its complete industrial chain that begins from the farms to the sales terminals. MISSION To become “China’s best dairy
Slide 22: Today's Vote & Outlook: A Bright Dairy Perspective
TODAY’S VOTE & OUTLOOK A BRIGHT DAIRY PERSPECTIVE PAGE 22 SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024
Slide 23: Asking a Question Online
ASKING A QUESTION ONLINE • To ask a question, click on the Q&A icon. • Click on the box, type your question, and press submit. • Your question will be asked at the appropriate part of the meeting. • Please ensure questions are concise, clear, and relevant to the meeting. PAGE 23 SPECIAL SHAREHOLDERS
Slide 24: Resolution & Voting
RESOLUTION & VOTING PAGE 24 SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024
Slide 25: Ordinary Resolution 1
ORDINARY RESOLUTION 1 “That, subject to Ordinary Resolution 2 being passed, the issuance of 308,333,333 shares to Bright Dairy Holding Limited at an issue price of 60 cents per share, contemporaneously (or substantially contemporaneously) with the occurrence of the matters contemplated in Ordinary R
Slide 26: Asking a Question Online
ASKING A QUESTION ONLINE • To ask a question, click on the Q&A icon. • Click on the box, type your question, and press submit. • Your question will be asked at the appropriate part of the meeting. • Please ensure questions are concise, clear, and relevant to the meeting. PAGE 26 SPECIAL SHAREHOLDERS
Slide 27: Ordinary Resolution 2
ORDINARY RESOLUTION 2 “That, subject to Ordinary Resolution 1 being passed: (i) the issuance of 76,283,104 shares to The a2 Milk Company Limited (or, at its direction, a whollyowned subsidiary of The a2 Milk Company Limited) at an issue price of 43 cents per share; and (ii) the settlement deed dated
Slide 28: Asking a Question Online
ASKING A QUESTION ONLINE • To ask a question, click on the Q&A icon. • Click on the box, type your question, and press submit. • Your question will be asked at the appropriate part of the meeting. • Please ensure questions are concise, clear, and relevant to the meeting. PAGE 28 SPECIAL SHAREHOLDERS
Slide 29: Special Resolution 1
SPECIAL RESOLUTION 1 “That, subject to Ordinary Resolution 1 being passed, Synlait Milk Limited’s constitution be amended, with effect from the issuance of 308,333,333 shares to Bright Dairy Holding Limited contemplated by Ordinary Resolution 1, as described in the Notice of Meeting dated 20 August
Slide 30: Asking a Question Online
ASKING A QUESTION ONLINE • To ask a question, click on the Q&A icon. • Click on the box, type your question, and press submit. • Your question will be asked at the appropriate part of the meeting. • Please ensure questions are concise, clear, and relevant to the meeting. PAGE 30 SPECIAL SHAREHOLDERS
Slide 31: Proxy Votes Cast Ahead of the Meeting
PROXY VOTES CAST AHEAD OF THE MEETING For Open Against Total Abstain Ordinary Resolution 1 83,377,042 (91.40%) 2,650,412 (2.91%) 5,195,662 (5.70%) 91,223,116 85,299,714 Ordinary Resolution 2 125,131,210 (94.00%) 2,657,812 (2.00%) 5,334,683 (4.01%) 133,123,705 43,399,125 Special Resolution 1 168,387,
Slide 32: This Concludes Synlait's Special Shareholders' Meeting
THIS CONCLUDES SYNLAIT’S SPECIAL SHAREHOLDERS’ MEETING PAGE 32 SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024
Slide 33: Disclaimer
DISCLAIMER This presentation is given on behalf of Synlait Milk Limited update this presentation at any time after its release, (Synlait). Information in this presentation: whether as a result of new information, future events or otherwise. • comprises a statement or report made to or for the purpos