OLAM International has agreed to extend its credit limit by up to $US35 million ($NZ42.9 million) to takeover target listed New Zealand Farming Systems Uruguay, in case it has to repay an overseas $US16 million bank loan next Thursday.
Shareholder acceptances of Olam's final 70c-per-share offer yesterday crept up to 85.29%; requiring 90% acceptances by next Wednesday for Olam to trigger a complete 100% takeover.
New Zealand Farming Systems Uruguay (NZFSU) has the $US16 million loan with banks in Spain and Uruguay. It has not yet had an answer from the bank syndicate to a waiver request, in which it may not meet banking covenants related to cash-flow, because NZFSU is still under development.
NZFSU said in a statement yesterday Olam has extended its credit limit so NZFSU can avoid a covenant breach and allow it to pay the $US16 million, by the agreed deadline of June 30.
The loan terms included 9% interest, repayable in full by December 31 and that there was no requirement for NZFSU to grant Olam security over its assets.
A headline yesterday which said Singaporean commodities giant Olam International was "lacking funds as deadline looms" was incorrect.
Olam's takeover of New Zealand Farming Systems Uruguay was at that time "lacking" 5.8% of shareholder acceptances it requires to achieve its 90% acceptances goal. At 90%, compulsory acquisition of the remaining 10% of shares is triggered.
