The company announced the sale agreement while releasing its financial results after posting a loss after tax of $39.8m — “adjusted” to a bottom-line profit of $0.8m — a drop from its large loss of $182.1m a year ago.
Synlait matched Fonterra in producing a record final payout of $10.15 per kg of milk solids for the financial year ending July.
Proceeds from the sale to US healthcare company Abbott will be used to cut debt.
The negotiations include the Pōkeno manufacturing facility, Auckland assets held at its blending and canning facility, another warehouse facility as well as inventory and leasehold arrangements.
Abbott has been a customer of Synlait’s since 2020.
Majority shareholder Bright Dairy Holding, with a 65.25% stake in the company, has given its approval which is expected to satisfy shareholder approval conditions.
Synlait chairman George Adams said the sale would strengthen the company’s financial position, with the proceeds used to significantly reduce debt.
He said Synlait was equally pleased Abbott would keep the “vast majority” of staff working at the sites.
The sale agreement is targeted to be completed by April 1, subject to conditions.
Synlait’s board has unanimously recommended shareholders vote in favour at the annual meeting on November 21.
Synlait’s marginal $0.8m profit was an adjusted bottom line result which the company said provided signs of encouragement.
tim.cronshaw@alliedmedia.co.nz
