Irish dairy company Ornua has signed a new €610 million syndicated bank facility, replacing its existing €420 million loan from February 2014.
The owner of brands such as Kerrygold butter and Dubliner cheese said that the new loan will extend for five years to November 2022 and that is comprised of two distinct parts:
€260 million (43%) will go to funding Ornua’s own working capital requirements and its international growth strategy through its syndicated ‘Revolving Credit Facility’ (RCF).
€350 million (57%) will be directed to funding the working capital requirements of the company’s members suppliers and Ireland’s dairy processors through its committed syndicated ‘Reverse Invoice Discounting Facility’ (RID).
An additional €100 million is available (€50 million to the RCF and €50 million to the RID) through an uncommitted tranche of funding, if required over the five-year period, according to Ornua. This would raise the total RCF to €310 million and the total RID to €400 million, amounting to €710 million overall.
According to Ornua, the participant banks remain the same as under the previous facilities: Allied Irish Banks; Bank of America Merrill Lynch; Barclays; HSBC; Rabobank; Ulster Bank.
Five-Year Growth Plan
“The successful refinancing ensures that Ornua retains access to the banking liquidity it needs to continue implementing our strategic five-year growth plan ‘Ornua 2021’ following the removal of milk quotas in 2015, and delivering strong product price returns for Irish dairy farmers,” said Donal Buggy, group finance director, Ornua.
“Not only does it strengthen our capital structure, but it also provides continued working capital support to our member suppliers and ultimately the dairy community across Ireland," Buggy added. "It is particularly pleasing that we have retained the same group of Irish and international banking partners, and we note that the deal was significantly over-subscribed demonstrating their continued support for Ornua and the Irish dairy industry.”
Ornua has continued to deliver growth in international markets this year across its Ornua Foods and Ornua Ingridients divisions, the company said.
In November, it launched Kerrygold butter in the South Korean market and it opened a new innovation centre in Chicago. It also returned Kerrygold butter to stores in the US state of Wisconsin after it was banned due to an old state law regarding foreign produce.
Last week, a survey undertaken by Irish trade publication Checkout, in association with market analysts Behaviour & Attitudes, found that Kerrygold butter was the brand that Irish emigrants ‘miss the most’.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Kevin Duggan. Click subscribe to sign up to ESM: The European Supermarket Magazine.
