Bright Dairy retains control of Synlait board

The New Zealand Exchange is allowing Chinese dairy Bright Dairy to keep control of the New Zealand milk company Synlait’s board despite a dilution in its stake. The exchange says it has granted Synlait Milk a waiver from a listing rule and that will permit Bright Dairy to continue to appoint four of eight directors, even though its shareholding will drop to between 38 and 41% with the NZ$120m offer of shares to the public. Bright Dairy holds 51 per cent now, after it pumped $82m into Synlait Milk in late 2010. It is not buying any new shares in the share offer to keep its holding at 51%.

Synlait is raising $75m from the issue of new shares and will also offer up to $45m of shares from existing shareholders selling all of part of their shareholdings. The new capital would be used for growth initiatives.