Debt swapped to secure peanutsEliza Rogers, Wednesday August 21, 2013 - 13:46 EST
The Peanut Company of Australia says it's righted its shaky financial position by swapping some of its debt for equity.
The National Australia Bank will take on $32 million of PCA's $48 million debt for an entitlement to 40 per cent of its capital in shares and warrants.
The bank will also overhaul the mechanisms PCA uses to finance itself, and provide a new two-year core debt facility and a two-year multi-option facility, which includes seasonal finance.
It will leave PCA with a core debt of $16.5 million.
CEO of PCA John Howard said the company could now expand its crop after years of debt burden and bad growing conditions.
"Over the last probably four or five years, we have fallen below our average intake. The market that we service requires a crop in that 25,000-30,000 (tonnes), so we'll be aggressively working with our growers to help enable that."
He said there was no downside to a bank owning a large chunk of the company.
PCA now needs 50.1 per cent of its 800 shareholders to agree to the deal, which Mr Howard expects will be overwhelmingly accepted.
© ABC 2013
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