Silver Fern Farms to repay bonds early

Silver Fern Farms to repay bonds early

A marked improvement in Silver Fern Farms’ balance sheet has prompted the company to re-negotiate its banking partnerships for the next tw o years. As a result, the company will re-pay its NZDX five-year bonds ahead of schedule.

Silver Fern Farms Chairman Eoin Garden says the re-syndication of the banking structure demonstrates the confidence a key group of stakeholders – the Company’s bankers – has in the strategic plan and vision of Silver Fern Farms.

“During the past two years, Silver Fern Farms has reduced its working capital by improving debtor management and decreasing inventory. Put simply, we are running the business more efficiently and therefore require less working capital. This has allowed us to repay debt and reduce our interest cost.”

Silver Fern Farms is forecasting an equity ratio of approximately 70 per cent at balance date (30 September 2010) and debt of approximately $118m. This compares favourably to an equity ratio of 52 per cent and $183m at the previous balance date.

The new syndicate involves Rabobank, HSBC, Westpac and CBA.

“We are very pleased to be aligned with these four banking partners, who we already have a robust relationship with,” Mr Garden says. “Each understands our business and supports our strategic direction – and we appreciate their support.”

The re-financing has prompted the re-payment of the five-year bonds, due 15 December 2010. They will now be re-paid 15 November 2010, with interest payable to that date.

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