Why the Synlait Milk (ASX:SM1) share price was lower today // Motley Fool Australia

The Synlait Milk Ltd (ASX: SM1) share price came out of a trading halt today, dropping 9.75% to $5.00 before recovering to $5.25 at the time of writing. The drop in Synlait Milk’s share price came after an announcement that the company would conduct a capital raising.

How will Synlait Milk raise capital?

Synlait Milk announced yesterday that it will raise approximately NZ$200 million. This will consist of a placement to raise NZ$180 million and an underwritten share purchase plan to raise NZ$20 million.

The placement will be conducted at a share price of NZ$5.10, representing a discount of 14% to the company’s trading price before the capital raising was announced. Synlait Milk announced today that the placement was fully…