Press release
Milk deal is "white stuff" for commercial finance
Lloyds TSB Commercial Finance has completed a £63.5 million refinancing deal with Milk Link, a Bristol-based farmer-owned dairy co-operative with over 2,000 members.
The funding package, which included a combination asset-based lending and loan facilities, was put in place by Peter Anderson at Lloyds TSB Commercial Finance with the assistance of Clive Hetherington of Lloyds TSB Corporate.
With a turnover of over £650 million, Milk Link is a leading integrated dairy business and the second largest cheese producer in the UK.
Since its inception in 2000, the organisation has moved from being purely a milk broker towards integrated dairy processing. It has introduced innovative products such as the Moo milk and cream range and the cholesterol-lowering Flora pro-active milk, which it produces for Unilever.
The facilities provided by Lloyds TSB Commercial Finance will allow the organisation to cut the levy payable by its members, the majority of whom farm in the South West.
From 1 April, Milk Link's Member Capital Account levy will be cut from 1p per litre of milk to 0.5p per litre. Meanwhile the contingent liability guarantee payable by members will be reduced from next month from 5p per litre to a maximum of 2p per litre.
Nairn Glen, Milk Link Group Finance Director, said: These announcements reflect important steps in the growth and development of Milk Link and its transformation from milk broker to a major vertically integrated dairy business.
Over the last four years we have acquired significant processing assets and our balance sheet has strengthened, which we can now leverage to support our remaining debt and deliver a significant improvement in our members' cashflow. This, of course, would not have been possible without the investment made and steadfast commitment of our members.
Lloyds TSB were able to understand our requirements and provided an innovative and timely solution. Both parts of the bank - Corporate and Commercial Finance as well as the other professionals involved, came together seamlessly.
Peter Anderson, Senior Regional Manager at Lloyds TSB Commercial Finance, also worked with Milk Link in 2004 on its acquisition of The Cheese Company Ltd., a joint venture with Glanbia plc in which Milk Link holds a 75 per cent stake.
Peter said: Working closely with our colleagues in Corporate we structured a facility which was largely revolving and enabled Milk Link to improve cash flow and ensure that its members continue to share in the success of the business.
Milk Link is one of the dairy industry's success stories and we are delighted to be working with such an innovative and growing business.
Several of the South West's leading professionals were involved in the refinancing deal. Julian Kinsey of Bond Pearce provided legal advice to both parts of Lloyds TSB.
A team led by Andrew Hillman at Deloitte provided corporate finance advice to Milk Link, with Sandra Forbes and her team at law firm Burges Salmon providing legal advice.
Lloyds TSB Commercial Finance is part of the Lloyds TSB Group plc.
