Synlait Milk Ltd's initial public offering has opened, the Mid Canterbury milk processor having set a final share price of $2.20.
The response from both New Zealand and international institutions and New Zealand retail brokers, after a recent roadshow and book-building process, was ''extremely positive'', chairman Graeme Milne said.
On completion of the IPO, Synlait Milk will have a market capitalisation of about $322 million. Trading of shares on the NZX main board is expected to start on July 23.
The IPO comprised $75 million in new capital to repay debt and fund the company's growth initiatives and a secondary offer of $38.7 million being 17.6 million existing shares originating from participating shareholders of Synlait Ltd.
Those growth initiatives included construction of a lactoferrin extraction and purification facility, a blending and consumer packaging plant, a dry store, a quality-testing laboratory, a butter plant and a spray dryer.
Synlait Milk, which was launched in 2005, is 49%-owned by Synlait and 51%-owned by Chinese food giant Bright Dairy and Food Co Ltd. Bright Dairy, which invested in the company in 2010 at a cost of $82 million, elected not to sell any of its shares into the offer and would retain its current shareholding. It would hold about a 39.1% shareholding once the IPO was completed.
Mr Milne said the response was a strong market endorsement for the ''compelling fundamentals'' of the New Zealand dairy industry and, particularly, the company's growth initiatives to accelerate the development of its infant formula and nutritional products business. Synlait Milk managing director John Penno said the successful completion of the IPO would be ''another important milestone'' in the company's history.
A new dairy industry strategy, Making Dairy Farming Work for Everyone, was launched in Parliament this week with the aim of enabling farmers to build economically sustainable businesses while maintaining a strong focus on environmental concerns.
The strategy has been developed by industry body DairyNZ, in partnership with the Dairy Companies Association of New Zealand, Federated Farmers' dairy section and the Dairy Women's Network.
Milk production in New Zealand had grown 47% in the past 10 years and reached 1.7 billion kilograms of milk solids in 2012, DairyNZ chairman John Luxton said.
Twenty-one percent of the country's grasslands were now used for dairy farming and the industry employed 45,000 people.
The size and scale of the industry demanded there be a new plan for farming competitively and responsibly and that was what the new strategy was about, he said.
