Dairy giant Arla Foods has revealed plans to issue SEK1.5bn (US$230.3m) in bonds to finance its growth strategy.
The bonds will be open to professional investors and owner finance will be secured through the consolidation policy approved by the co-operative members in 2010 when they decided to double their investment in the company.
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The borrowed funds will come from the group’s lenders, including banks and other financial institutions.
Arla said the moves are part of its strategy to increase its turnover from DKK49bn to DKK75bn by 2015. It is looking to establish the broadest possible financing platform without compromising the company’s ownership structure.
“Arla has solid backing from its co-operative owners. Nevertheless, we also have a duty to ensure that we, as a company, have the best and broadest borrowing and financing opportunities in our pursuit of acquisitions and investments in keeping with our growth strategy,” said CFO Frederik Lotz. “This is why we have decided to issue bonds as an attractive investment for institutional investors.”
Arla Foods said it will remain as a co-operative and not a limited company.
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