Synlait deferring IPO

Synlait Milk's plans for a float on the New Zealand stock exchange by Christmas have been deferred.

It is understood that Canterbury based Synlait has been looking to raise about $150 million from institutions to double the size of its milk processing facilities.

Today Synlait said it had deferred its plans to have an initial public offering of shares, following a pre-marketing program to brokers and local and international institutional investors.

It has given no timeframe yet as to when a float might occur.

"Synlait received strong support for the IPO from local institutional investors and the lead manager but the overall level of support was insufficient to proceed at this time,'' the company said in a statement.

"Synlait remains committed to executing its plans and will continue to consider a future IPO and the alternative proposals centred on private capital placements that have been negotiated in parallel.''

The extra capital has been eyed by Synlait to potentially build a second milk processing factory to more than double its production, with some used to drive exports into Asia.

Synlait is the brainchild of its managing director John Penno, with founders, North Island farmers Ben Dingle and Juliet Maclean.

The start of the company goes back to 2000 when the three joined to to buy the 600ha Robindale farm at Te Pirita, near the Rakaia River.

In recent years it has it developed a milk powder plant investing more than $105 million in processing and storage assets that started pumping out milk products in August 2008.

Japanese firm Mitsui is a shareholder in Mitsui, and has also loaned money to the company, based south of Dunsandel.