Bright Dairy emerged with a 51% stake in 2010, paying $82 million and said at the time it would consider a share market listing in three to five years. Bright Dairy would be entitled to new shares to retain its holding, it said back then. Synlait Ltd, associated with the company’s founders, owns the rest.
Bright Dairy gave no details about the potential size of an IPO in a statement to the Shanghai Stock Exchange, Bloomberg News reported.
A spokesman for Synlait Milk said the company will make a statement shortly.
Synlait processes more than 500 million litres of milk a year. In December it announced a maiden profit for the year to July 31, 2012, of $6.3 million.
Equity investors wary of stock offerings in the wake of the global financial crisis, which dried up credit markets. More recently, a host of new issues have been flagged as coming to market, including SLI Systems, Wynyard and Serko, a technology company.
The market has been buoyed by the float of state-owned MightyRiverPower and the prospect of another SOE coming to market later this year, while the benchmark NZX 50 Index has been charting record highs this month.
Last week, Synlait Milk said it was investing $15 million to upgrade its Special Milks Drier at Dunsandel as it looks to further tap into the $15 billion a year demand for infant formula in China.
Chief executive John Penno said the decision to invest in the high value ingredient had been stimulated by contracts with eight significant customers for infant formula including YinQiao Xi’An, the largest dairy manufacturer in north western China, Synlait Milk’s cornerstone shareholder Bright Dairy and A2 Corporation which will soon launch its own a2 infant formula in China.
© BusinessDesk 2013
