IDB secures additional €100 million for dairy expansion under €350 million re-financing

The Irish Dairy Board (IDB) has completed the re-financing of its existing €250m syndicated banking facility replacing it with a new three year syndicated bank loan facility of €350m at competitive pricing, to meet domestic expansion and international growth requirements.

The participant Banks are; Allied Irish Banks, Bank of America Merrill Lynch, Barclays, HSBC, Ulster Bank and Rabobank, with IBI Corporate Finance advising on the deal.

This new facility comprises two parts:

• a €160m syndicated loan facility to fund IDB’s existing requirements and to invest in developing its international growth strategy; and
• a €190m committed syndicated Reverse Invoice Discounting facility (RID)* to fund the working capital requirements of IDB’s members. This will provide IDB’s members with an additional €50m and greater security of funding, replacing the previous uncommitted working capital funding lines provided heretofore by IDB to its members.

The RID is a recent development in supplier financing by international banks to fund the working capital requirements of their international corporate clients.

IDB and Rabobank, as lead bank and arranger of the RID, and the other participating banks, have developed a facility which accommodates the specific funding requirements of IDB’s members.

The RID will be used by IDB as the platform to develop a scalable funding solution to finance the increase in working capital requirements that will arise as a result of the anticipated increased milk expansion post the abolition of milk quotas in 2015.

Commenting, Cathal Fitzgerald, Finance Director, IDB said: "The successful completion of this deal in the current financial environment and on competitive terms is a strong vote of confidence by the participating banks in the IDB and the Irish dairy industry. The new facilities strengthen our capital structure and enhance the operational flexibility of the IDB by extending the maturity profile of our debt to December 2014. For our members, this unique facility is a significant step forward on the path to developing a robust funding solution to support the future development and growth of the Irish dairy sector."

Ends

Notes to Editor:

Reverse Invoice Discounting
* The RID allows members discount their sales invoices to IDB, receiving funds up front, with IDB providing security of payment to the Banks.

About the Irish Dairy Board
The Irish Dairy Board (IDB) is Ireland’s largest exporter of premium dairy products and a leading international food company with a global footprint that extends to over 80 countries worldwide.

The IDB reported a turnover of €1.9bn for the year ended 31 December 2010. Headquartered in Dublin, Ireland the business employs over 3,700 people globally. Over the past 50 years, the IDB has established vital routes to market for Irish dairy produce and is a leader in product innovation.

A co-operative enterprise, the IDB is owned by Irish dairy processing co-operatives and dairy companies and, through them, by Irish dairy farmers. The IDB’s business is structured on three core platforms; consumer foods, dairy trading and ingredients and DPI, a speciality food distribution company in the USA.

Group subsidiaries in the UK, mainland Europe and the US pack, distribute and market a wide selection of branded products, dairy ingredients, speciality grocery, delicatessen and gourmet food items of both Irish and non-Irish origin. The IDB owns the internationally renowned Kerrygold brand – one of the Irish dairy industry’s most important marketing assets – along with other brands including Pilgrims Choice and Beo. The IDB’s food ingredients arm develops bespoke food ingredient solutions for many of the world’s major food manufacturing corporations.

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