20 Jul 2010

Synlait deal evidence that NZ can't grow companies - commentator

5:42 pm on 20 July 2010

A business commentator says an investment in a Canterbury dairy company by a Chinese company, is yet more evidence of New Zealand's capital markets being unable to develop and hang on to growing companies.

Subject to regulator and shareholder approval, Bright Dairy of China, will pay $82 million for a 51% stake in Synlait Milk.

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

Business commentator Rod Oram says the deal will provide the capital needed for Synlait to expand, but it's unfortunate it could not be found within New Zealand.

"It's just plain we can't grow companies in this country - even in dairying, the most powerful sector," he said.

Milford Asset Management's executive director, Brian Gaynor, says the move reflects the very poor state of New Zealand's capital markets and investors' lack of interest in them.