The a2 Milk Company has announced that it has reached a conditional settlement to resolve its arbitration disputes with Synlait Milk.
The settlement, which is subject to Synlait completing its equity raise and refinancing its existing banking facilities, includes the acceptance of a2MC's notice to cancel Synlait's manufacturing and supply exclusivity rights for stages 1 to 3 of a2MC's infant milk formula products.
This exclusivity will cease on Jan 1, 2025.
a2MC also clarified that it is now free from any restrictions or obligations to source products from Synlait or any other party.
As part of the settlement, a2MC will make a one-off payment of $24.75 million to Synlait and there will be incremental increases in pricing for certain existing products.
The company's decision to support Synlait's recapitalisation plan was driven by the strategic importance of production stability at Synlait's Dunsandel manufacturing site.
The settlement does not affect a2MC's FY24 guidance.
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