Debt-free co-op key to Glanbia sale plan
Herlihy insists new entity will be a 'hard-nosed' commercial outfit
Delivering a debt-free business will be essential to securing farmer support for the purchase of Glanbia's Irish operations, Glanbia Co-op chairman Liam Herlihy has said.
Mr Herlihy confirmed that he does not envisage the co-op taking over any of the Glanbia plc debt -- around €440m -- as part of the buyout plan.
Last week Glanbia plc confirmed that it was in talks with Glanbia Co-op regarding the possible sale of its Irish milk processing, consumer foods and agri-trading elements.
Any deal will require the backing of 75pc of the 7,250 co-op shareholders in two separate votes.
However, several Glanbia council members said it was still too early to confidently say whether the plan would get the go ahead from farmers.
The co-op aims to pay for the business by selling a proportion of its 54pc shareholding in the plc. Securing a debt-free business is key to the co-op board's business plan and will be critical in winning over farmer backing.
"The debt of the plc is nothing to do with us. We are buying the Irish businesses, brands and properties; we are not buying the debt," Mr Herlihy said.
"The co-op board is incredibly conscious that our business model must be sustainable and that any deal is done within safe financial parameters, which leave us with no core debt and low gearing."