Fairfax Media Network

Weather News

Debt swapped to secure peanuts

Eliza Rogers, Wednesday August 21, 2013 - 13:46 EST
ABC image
The Peanut Company of Australia works with about 150 growers across Australia, and says a new financial deal could expand production. - ABC

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

© ABC 2013

More breaking news

ABC News
Sydney Morning Herald
National Nine News
News Limited

Display Your Local Weather

Weather News

Wet week for NSW

20:12 EST

Three rain-bearing systems will traverse New South Wales within the next seven days, rounding out a bumper May.

Big surf closes beaches across Sydney, NSW

18:13 EST

Surf lifesavers have issued a warning to beachgoers as a large swell closes stretches of the New South Wales coastline.

Dampened SA in for more rain but also cold, strong winds

18:01 EST

Rain has fallen across a large part of South Australia during Wednesday and there is more to come, mainly on Friday, coinciding with cold winds.