Glanbia plc, has been informed by its largest shareholder, Glanbia Cooperative Society that it intends to raise €100 million by issuing a five-year exchangeable bond against Glanbia plc shares it owns.
Glanbia plc informed the stock exchange of the move yesterday and the bond is linked to a pledge of approximately 4.3 million Glanbia shares which the Society owns.
In total, the Society and its subsidiaries hold 108,014,900 ordinary shares in Glanbia.
The initial exchange price of the Bond was set at €23.26, representing a premium of 40% to the volume weighted average price of Glanbia shares on the Irish Stock Exchange between launch and pricing earlier today.
The number of issued shares in Glanbia plc will not change as a result of this Bond placement.
Glanbia Co-op intends to use the majority of the proceeds from the bonds for the creation of a dynamic market volatility fund for its milk and grain supplying members.
This fund will enable participating Members to draw down funds on an interest-free basis when the market price for milk and grain falls below specific levels.
Subject to underwriting criteria, the interest rate charged on the Milk Flex loans will be a variable rate of 3.75% above the monthly Euribor cost of funds (with a Euribor floor of zero).
The loans will have a standard term of eight years, but may be extended by up to a maximum of a further two years when volatility triggers are enacted.
The Society will recover the funds drawn down when milk and grain prices exceed a higher price trigger. The remaining proceeds will be for general business purposes.
The remaining proceeds will be used for general business purposes.
