Bright Dairy to cede majority stake in NZ's Synlait Milk

Synlait on Monday issued a prospectus in advance of its bid to raise NZ$75 million ($58.04 million) in its initial public offering.

The indicative price range for the offer of NZ$2.05 to NZ$2.65 per share would give Synlait a market capitalization of NZ$305 million to NZ$372 million when it is listed on July 23, said a statement from the company.

The capital raised would help pay down debt and fund Synlait's growth initiatives, which included a new extraction and purification plant to produce lactoferrin, an important ingredient in some infant formula products, and other facilities.

Synlait Milk managing director and co-founder John Penno said the cornerstone shareholding of Bright Dairy had provided Synlait with valuable strategic insights into the China market.

"Bright Dairy also became an early customer for our fully- formulated infant formula," Penno said in the statement.

Bright Dairy had elected not to sell any of its shares into the offer and would retain its current shareholding, which would see its percentage holding fall from 51 percent to about 40 percent after the listing.

The final price for shares would be announced on July 10 and the closing date was set for July 19. Trading of shares is expected to start on July 23.

Shanghai-based Bright Dairy purchased its majority stake in the Synlait Milk for NZ$82 million in 2010.