IDB raises €350m in loans to fund expansion plans

The Irish Dairy Board (IDB) dairy co-operative has raised €350m in loans from international banks in order to expand its sale of Irish dairy products into new markets including Russia, China and south-east Asia.

The deal includes the refinancing of its current €250m loan and the raising of €100m in additional funds. About €160m will be used by the cooperative to fund its existing requirements and invest in international growth plans that include boosting sales in emerging markets.

The loan includes a Reverse Invoice Discounting facility of €190m, considered to be the first of its kind, which allows the member co-operatives that supply products to IDB to be paid in advance for the value of invoiced sales through short-term loans. The loans, which have been raised through a syndicate of six banks (Allied Irish Banks, Bank of America Merrill Lynch, Barclays, HSBC, Ulster Bank and Rabobank), are to be repaid in December 2014.

IDB finance director Cathal Fitzgerald said the new facilities strengthen the co-operative’s capital structure and enhance the operational flexibility by extending the maturity profile of their 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," Fitzgerald said.

IDB, which owns brands such as Kerrygold, Pilgrims Choice and Beo, was advised by IBI Corporate Finance on the deal.

Headquartered in Dublin, Ireland, IDB is owned by the Irish dairy processing co-operatives and companies that include Arrabawn, Carbery, Town of Monaghan, Connaught Gold, Dairygold, Glanbia, Lakeland, North Cork, Tipperary and Wexford.