Milk Link seeks £15m funding from members

MILK LINK is hoping to raise a further £15m from members to reduce the cost of servicing debts racked up in the acquisition of processing assets, including Glanbia’s cheese business.

Investors could see a dividend return as soon as winter 2006 or early 2007, according to group finance director Nairn Glen.

If the money was raised by March 2006, it would enable the co-op to roughly halve its annual £23m debt burden, he said.

And if the co-op were debt free, payments would amount to more than 1.5p/litre, he added.

Members’ 1p/litre capital account levies could also be reduced to a nominal amount or cut completely by April next year, said Mr Glen.

Farmers signing up to the scheme, which will be optional and  fully detailed in time for the co-op’s September AGM, will receive two membership certificates for every extra £1 invested.

Existing contributions to members’ capital accounts will qualify for membership certificates on a like-for-like basis.

Farmers will also have the option to convert any capital proceed loan notes, issued to replace their Milk Marque preference shares, into their capital accounts. Every £1 transferred will receive two membership certificates.

NFU dairy board chairman Gwyn Jones welcomed the proposal, saying: “This is very good news indeed. It is much better that farmers get the interest on their money than the banks.”

Some Milk Link members expressed interest in the scheme, while others said they could not afford further losses.