Synlait co-founder John Penno has stepped down from the board of the company he helped create and George Adams has been elected as its new chair.
Penno co-founded Synlait and was managing director and chief executive for 12 years.
In 2018, he became a board-appointed director, after which he was temporarily appointed acting CEO and then chair.
His resignation is effective immediately.
Penno said he fully supports Adams’ appointment as chair and remains committed to Synlait’s future as a co-founder and shareholder.
“Synlait has come a long way since we co-founded the company buying a farm in Te Pirita near Dunsandel almost 25 years ago. We now take world-class nutrition products to the world and have played a disruptive role in the growth of the New Zealand dairy industry,” Penno said.
“I am proud of what we have achieved. However, now is the right time for me to leave my leadership role with Synlait.”
The changes come a month after the company’s interim result reported a net loss of $96.2 million after tax, hammered by massive writedowns of underutilised North Island manufacturing facilities and Dairyworks.
It also outlined potential recovery options including selling the Pōkeno processing plant and the Auckland blending and canning plant, a discounted sale of Dairyworks subsidiary and, reluctantly, an equity raise backed by its largest shareholder, Bright Dairy.
Former acting chair Paul McGilvary and chief executive Grant Watson said during the release of the result that the No 1 priority was to reduce the debt level, which was $559m on January 31.
“Net debt is $145.5m higher than FY23 due to poor operational performance, seasonal inventory build, and higher financing costs.
“Synlait is facing several material uncertainties with regard to the timings and outcomes of deleveraging options which are currently progressing, and which are critical in ensuring Synlait will continue to meet financial obligations as they fall due.”
Adams’ transition to chair follows a previously signalled plan that McGilvary would return to his position as an independent director once a permanent successor was found and elected
Adams was appointed an independent director of Synlait in March this year to fill a casual vacancy.
He was elected with the full support of the board.
Adams said it was a privilege to be chair of Synlait.
“I look forward to helping oversee Synlait’s path back to profitability and support Grant and his executive team’s execution of the strategy to do so. I thank my fellow directors, including Paul McGilvary, for their stewardship and counsel during the transition.”
Adams will formally stand for election as an independent director by Synlait shareholders at the company’s annual meeting in December. His appointment as chair is effective immediately.
