The latest news, trends, analysis, interviews and podcasts from the global food and beverage industry

Dairy processor Synlait Milk has finalised documentation for a NZD 320 million (approx. £137.6 million) bank refinancing package alongside a replacement NZD 130 million (approx. £55.7 million) shareholder loan from major shareholder Bright Dairy International Investment Limited.

The refinancing introduces a new banking syndicate comprising nine lenders, including ANZ Bank, HSBC, Bank of China and China Construction Bank, replacing Synlait's existing financing arrangements.

The new funding package consists of a NZD 15 million (£6.42 million) secured overdraft facility, NZD 146 million (£62.55 million) in seasonal working capital facilities, NZD 119 million (£50.97 million) in secured term loans, a NZD 15 million revolving NZD/CNH facility and a NZD 25 million (£10.7 million) NZD/CNH term loan.

The facilities remain subject to customary conditions precedent and are expected to become effective by 30 June 2026. The refinancing establishes a new covenant framework designed to support Synlait's turnaround while maintaining financial discipline. Key requirements include a net senior leverage ratio of 3.0 times from June 2027, minimum working capital and interest cover ratios, quarterly EBITDA milestones and shareholders' funds of more than NZD 450 million (£192.68 million).

Several of the facilities mature in June 2027, with lenders holding options to extend them by an additional three months. The seasonal working capital facilities will reduce in size during 2027, stepping down from NZD 146 million to NZD 86 million in March, before reducing further to NZD 26 million in June as the company continues to lower its reliance on short-term funding.

Alongside the refinancing, Synlait has executed documentation for a replacement NZD 130 million shareholder loan with major shareholder Bright Dairy International Investment Limited. The new loan replaces the existing shareholder financing, with repayment of the previous facility and drawdown of the replacement loan expected in early July following completion of the bank refinancing.

The refinancing and revised shareholder loan represent another step in Synlait's efforts to stabilise its balance sheet after a challenging period for the New Zealand dairy processor. With a refreshed capital structure, the company is seeking to improve financial flexibility while maintaining investment in its manufacturing operations and customer partnerships across the dairy ingredients and nutrition sectors.