Synlait shares rally 9.6% after settlement reached

AUCKLAND: Shares in Synlait Milk rallied by 9.6% after the company said it had reached a settlement over its disputed Pokeno factory site.

By 10.40am yesterday the stock was up 49c from Thursday’s close at $5.60.

The company said it had reached a settlement with New Zealand Industrial Park Limited and Karl Ye over historic land covenants at the company’s Pokeno site, ending several months of uncertainty over the nowcompleted plant built there. Terms were not disclosed. ‘‘Synlait and New Zealand Industrial Park are committed to working collaboratively for the benefit and integration of the Pokeno community and are pleased to have this behind us,’’ Synlait chief executive Leon Clement said.

Further details of the settlement agreement will not be disclosed due to confidentiality, he said.

Mr Clement said the settlement price was ‘‘reasonable and not material to Synlait’’.

The Supreme Court has been informed that a settlement has been reached.

In 2018, Synlait bought land at Pokeno and began building a dairy processing plant.

Part of the purchase agreement included Synlait securing a release from a covenant on the land that restricted activity to farming, forestry and lifestyle blocks.

Permission was only granted by the High Court in November 2018, when construction was well under way.

A neighbouring landowner took the decision to the Court of Appeal, which reinstated the covenants.

Synlait had been granted leave to appeal to the Supreme Court and a hearing took place in early June.

As a result uncertainty has weighed on Synlait’s share price.

The stock last traded at $5.11, having dropped by about 45% over the past 12 months.

Synlait is just under 20% owned by its biggest customer, a2 Milk. — The New Zealand Herald