Kerrygold manufacturer Ornua refinances debt with €580M syndicated banking facility

15 Dec 2021 --- Irish dairy cooperative Ornua has secured a five-year syndicated bank facility of €580 million (US$653.8 million) to refinance its debt, replacing its existing 2017 facility. The new facility will extend to December 2026, and incorporates sustainability key performance indicators that address emissions, waste and diversity targets.

“The refinancing ensures that Ornua retains access to the banking liquidity it needs to deliver strategic growth initiatives and strong product price returns for our members and Irish dairy farming families,” remarks Donal Buggy, group finance director at Ornua.

“Not only does the €580 million (US$653.8 million) facility strengthen our capital structure, but it also provides increased working capital support to our members and ultimately the dairy community across Ireland,” he continues.

“We are very pleased that the deal was again over-subscribed – a clear indicator of our banking partners’ continued support of Ornua’s growth strategy.”

Kerrygold, Ireland’s €1 billion (US$1.1 billion) food brand, is the second-largest butter brand in the US.

Breakdown of the refinanced facility
The refinanced facility comprises of two distinct parts:

• €200 million (US$225.4) committed syndicated Revolving Credit Facility (RCF) to fund Ornua’s working capital requirements and its global growth strategy via strategic capital investment and acquisition
  
  
• €380 million (US$428.3 million) committed syndicated Reverse Invoice Discounting Facility (RID) to fund the working capital requirements of Ornua’s member suppliers, Ireland’s dairy processors 

In addition, a further €100 million (US$112.7 million) is available, if required over the five-year period, under the facility (€50 million under the RCF and €50 million under the RID), by way of an uncommitted tranche of funding.

This would bring the total RCF to €250 million (US$281.8) and the total RID to €430 million (US$484.7 million).

Ornua business developments
Ornua has continued to deliver strong growth across global markets in 2021.

Recent highlights include the expansion of its US cheese ingredients business with the acquisition of Wisconsin-based cheese business Whitehall Specialties.

The Dairy cooperative has also managed to maintain the continuity of its supply during the global shipping crisis with 500 containers shipped weekly, while retaining sales of over 10 million packets of Kerrygold each week.

Kerrygold, Ireland’s €1 billion (US$1.1 billion) food brand, is the second-largest butter brand in the US.

Edited Benjamin Ferrer