The commercial terms of the transaction are confidential.
At this stage, MG’s total FY18 milk intake is expected to be approximately 2.3 billion litres, prior to any significant upside or downside from seasonal impact.
The reduction in milk intake has not impacted the opening average available Southern Milk Region farmgate milk price (FMP1) of $5.20/kilogram milk solids (kg MS).
The impact of the reduction in milk intake has been offset by various cost and business improvements compared to budget.
While maintaining the forecast FY18 FMP range of $5.20-$5.50/kg MS, if the recent strengthening of the Australian dollar was to continue over the full financial year, this could create some uncertainty in relation to the achievability of $5.50/kg MS. MG will continue to consider all avenues to maximise the available FMP.
MG will provide a further business update at the time of the release of the FY17 full year results announcement on 22 August 2017, or earlier as required.
MG has appointed Deutsche Bank AG as financial adviser to MG on the previously announced comprehensive strategic review.