Ann: Market update deleveraging plan, bank covenants, guidance, page-74

I agree, the best option for everyone is a takeover by Bright and A2. But I reckon NZ$1.8 - $2.2 is far too rich. That's 6 to 7 times more than current SP. Gee - even Yiili surprised the market by offering 3.5x for Westland milk when they were in trouble.But lets look at a Bright / A2 buy out.. Between them they hold 58.84% of shares. And of their share's bright hold for simplicity sake lets call it 65%. A2 has 35%. That leaves 89.96 shares held by others.

Say they offered current shareholders double today's Share price or $0.60 a share. Bright / A2 would need to come up with $54m.. Or $35.1 from Bright and $22.75m from A2

So that's now the decks cleared. Shareholders are happy.

But the bank wants $130m . So lets say Bright stumps up $84.5m and A2 comes up with the other $45.5m

At this point Bright has spent $138m and gained control of Synlait as well as clearing the immediate bank Debt. Seems a better plan than just loaning Synlait $130m

And A2, for $68.25m have bought themselves a whole pile of shiny new stainless steel processing.

Basically Bright have stumped up what they committed to and A2 have spent chump change.

Now there is the problem with the bonds. Which isn't really a problem. Firstly flog off Dairyworks. Surely they should get $90m for that. Leaving $90m owed to bond holders.

Bright can come up with $58.5m and A2 throws in $31m and that's bond holders happy.So Shareholders happy getting double their share value and pleased to exit with a bit of their shirt left on. Bond holders are happy because they get all their cash back. Banks are happy because there is a whole lot less debt. A2 shareholders are happy because they've only spent $100m for a lot of processing capability. Farmers are happy because they are now supplying to a quality JV, not a Mom and Pop processor. And China is happy because they have retained quality supply.