20 Jul 2010

Market float of Synlait Milk possible in future

6:13 am on 20 July 2010

Synlait says floating its production arm Synlait Milk on the share market is still a possibility - but not for a few years.

Bright Dairy of China has taken a stake of 51% in Synlait Milk.

The deal is still subject to regulator and shareholder approval, but will involve Bright Dairy investing $82 million in Synlait Milk.

Craigs Investment Partners says the partnership will help the Canterbury-based dairy company to expand.

But Federated Farmers says it's an indictment on New Zealand's capital markets that Synlait could not get the investment capital it needed here.

Last year Synlait deferred plans to float Synlait Milk after a lack of support from small investors.

However, chief executive John Penno says Synlait Milk may reconsider an initial public offering in the future.

Craig Investments Partners says it makes sense for the Chinese to take a share in some of the producers they buy from.

Research head Mark Lister says it was a difficult market when a share float was last mooted, and he thinks it could be an option in time.