Dairy Crest completes reorganisation of capital structure

18th Apr 2013 10:04

Dairy Crest announced Friday it has completed a reorganisation of its capital structure and agreed to pay more into its pension fund.The dairy products company started the reorganisation after last year's £341m cash sale of its French spreads business, St Hubert.It included the early repayment of £100m of loan notes at an exceptional cost of £8.8m, a reduction of the revolving credit facility by £60m to £247m and a one-off cash contribution of £40m to its pension fund.The pension fund has been granted a floating charge over maturing cheese inventories with a maximum realisable value of £60m.Earlier this month the firm made a scheduled repayment of a further £60m of loan notes.Dairy Crest said the company now has more appropriate capital structure with lower interest charges of about £7.0m in the year ending March 31st 2014, leading to an improved dividend.While the group has no immediate plans to make major acquisitions, it retains its ability to make smaller purchases and invest in internal capital projects which will generate attractive returns for shareholders. Chief Executive Mark Allen said: "Following the successful sale of St Hubert, we have now restructured our balance sheet, putting in place a more appropriate capital structure."This will reduce interest costs going forward and underpin the dividend and still gives us scope to invest to grow the business."We are also pleased to have reached agreement with the trustee of the pension fund to improve its financial position at an acceptable cash cost to the company."RD