Synlait, page-157

@col69

It's interesting isn't it. I find it hard to believe that Synlait would persist in its objections about the exclusivity issue, given where they are at right now.

Whichever way A2M votes, there really is no need for them to disclose this to Synlait beforehand. It would be a courtesy that Synlait has not earned. Synlait should have dropped the exclusivity matter long ago, it has only done them a lot of damage and continues to do so.

As I've said for some time, I really don't think Bright would ever allow Synlait go under. Full stop. Their comments recently seem to confirm this. It is also unlikely they would relinquish control of Synlait and its Dunsandel facility.

If you accept this, then it also follows that A2M's supply remains secure in the likeliest scenarios where they do not approve this loan.

Not approving the loan will then set in motion the negotiations between A2M and Bright about takeover scenarios for Synalit. Either a bidding war or a JV.

Even if Bright were to acquire effective ownership of Synlait they would still need A2M as a customer to make it financially viable. Their higher ups are not going to sign off on a takeover of Synlait without retaining the business that A2M brings.

And if A2M were to take a greater stake, they would presumably rather retain the mutual cooperation and investment of Bright as a partner, given how capital intensive manufacturing is (particularly in light of Synlait's problems).

Which is why I think a JV ultimately makes the most sense here, but a No vote by A2M on the loan is required in order to get there.