At its Annual General Meeting held today, September 20, Milk Link gave an update on its refinancing proposals.
In June, Milk Link announced proposals, in response to a members' initiative, to raise up to £15 million of new money from members in order to facilitate refinancing the business. However, having held constructive meetings with its bankers to explore alternative financing arrangements Milk Link now believes that the business can be refinanced on a permanent basis by the end of the financial year without having to ask members for additional capital. This would mean that Milk Link members would benefit from a significant reduction in their member capital account contribution from 1 April 2006. At the same time Milk Link has also confirmed that it is having positive discussions to remove the 5ppl contingent liability from its members.
Commenting on the announcement Nairn Glen, Milk Link Group Finance Director said:
"During the summer we have had a number of constructive meetings with our bankers to explore new financing arrangements, hitherto not open to us. This became possible because Milk Link now has a significant and secure asset base, a proven track record and it was also clear to the banks that we had the full support of our membership. As such, we now believe our plans to refinance the business on a permanent basis by the end of the financial year are not contingent on a need for members to subscribe additional capital. The aim of the refinancing is to reduce significantly the current 1ppl member investment levy."