14 Nov 2009

Synlait plans float

8:35 pm on 14 November 2009

The milk company Synlait is planning to float its production arm on the stock market.

Synlait has issued a statement about an initial public offering and won't comment further, but is understood to be seeking about $150 million to double its milk processing capacity.

Synlait, which accounts for about 1% of the country's dairy production, says it plans to offer shares in subsidiary Synlait Milk, to fund the building of a second production facility at its existing site in Canterbury.

Synlait owns dairy farms in Canterbury and has one processing factory, with total assets worth about $400 million.

Investors have been starved of new companies to invest in since December 2007, when New Zealand Farming Systems Uruguay listed.

But that looks set to change, with the outdoor clothing and equipment retailer Kathmandu listing on the New Zealand and Australian stock exchanges on Friday.

The terms of Synlait's offer have not been finalised, but it is expected to open later this month, with First New Zealand Capital managing the process.