Synlait Milk Ltd (ASX:SM1) has completed the NZ$307 million sale of its North Island assets to Abbott, marking a key step in the company’s balance sheet repair and wider recovery plan. The major divestment cuts debt and shrinks bank facilities as the company pushes ahead with refinancing and recovery plans.
The transaction covers the Pōkeno manufacturing facility, related inventory and Synlait’s leasehold Auckland sites. Synlait said gross proceeds received overnight were about NZ$283.1 million, with a further US$14 million held back under the sale agreement to be released progressively after completion, provided no post-completion claims arise.
The company will use NZ$200 million from the sale proceeds to repay bank facilities, reducing its total committed bank debt facilities to NZ$200 million from NZ$400 million.
Synlait is a global partner to several of the world’s largest multinational brands, offering end-to-end services across nutritional dairy and plant-based products, from powders and lactoferrin through to finished consumer-packaged goods tailored to customer requirements.
Refinancing process now underway
Following the repayment, Synlait’s remaining bank facilities will mature on June 30, 2026, excluding its NZ$15 million overdraft facility, which remains on demand. The company said a refinancing process is now underway.
Synlait said the asset sale would strengthen and simplify the business, while allowing it to focus on its Canterbury operations. However, it also noted that its balance sheet has been affected by costs tied to FY25 manufacturing challenges, meaning further work remains despite the debt reduction.
The transaction also results in a lower level of revolving credit and term loan facilities across the group, while Synlait continues to carry a $130 million shareholder loan from Bright Dairy International Investment Limited that matures on 12 July 2026.