Synlait's updates on deleveraging plan, banking covenants, and FY24 guidance

Synlait Milk Limited (ASX: $SM1) has announced updates on its deleveraging plan, banking covenants, and full year 2024 guidance. The company is set to receive a $130 million facility from Bright Dairy, is in discussions with its banking syndicate regarding covenant waivers, and has revised its FY24 EBITDA forecast to the lower end of the range.

Executive commentary on Synlait's updates

Synlait Chair George Adams expressed gratitude for the support from Bright Dairy and highlighted the ongoing work with Bright Dairy on the shareholder loan and future equity raise. The company remains committed to deleveraging its balance sheet and is engaging with its banking syndicate on the broader plan. CEO Grant Watson emphasized Synlait's value proposition to farmers, including the Lead with Pride™ programme and attractive speciality milk premiums.

Summary of Synlait's announcement and outlook

Synlait has provided updates on its deleveraging plan, including a $130 million facility from Bright Dairy and the ongoing discussions with its banking syndicate regarding covenant waivers. The company has revised its FY24 EBITDA forecast to the lower end of the range due to factors such as softening ingredients margins, inventory provisioning, and increased financing costs. Despite acknowledging the challenges faced by its farmer suppliers, Synlait remains committed to working with them to improve its offering. The company's focus on deleveraging its balance sheet and its commitment to delivering value to farmers reflect its strategic priorities and ambitions for the future.