Chinese dairy giant Bright Dairy & Food is pumping NZ$185 million (US$114 million) into its New Zealand subsidiary Synlait Milk, which is a leading infant formula and dairy producer, to provide relief to its debt problem while at the same time consolidate its control over the company.
The fund injection in the form of shares will almost double the size of Bright Dairy’s holdings to 74.7% from 39%.
Synlait Milk boasts of world-class dairy product processing bases with a string of major clients. Bright Dairy bought into Synlait Milk, New Zealand’s 3rd largest dairy producer in 2010. Business was good and the company went public in New Zealand in 2013 and in Australia in 2016. However, in 2021, during the pandemic, Synlait Milk started to make losses as it was affected by the surging price of raw milk and shipping costs. The loss has continued to widen and weigh down Bright Dairy’s business performance in recent years. As of 31 May this year, Synlait Milk’s debts amounted to a whopping 57.6% of its total assets at Rmb 4.3 billion (US$602.7 million).
