- Namoi Cotton’s (NAM) joint venture, Namoi Cotton Alliance (NCA), has received an extension on its banking facility with ANZ, which will expire on April 30 2021
- Under these terms, the company will need to make a prepayment of approximately A$12 million in margin facility by June 12
- Namoi’s joint venture partner, Louis Dreyfus Company (LDC) has also tentatively agreed to extend a facility of approximately A$11.2 million
- The extensions will help to fund the overall restructuring of the joint venture’s business
- Namoi Cotton’s shares have dropped 10 per cent this morning and are trading for 31.5 cents each
Leading cotton company Namoi Cotton (NAM) has provided an update on banking facilities which fund the company’s joint venture, Namoi Cotton Alliance (NCA).
On April 29, the company announced that bank facilities for the NCA joint venture would expire on May 29, 2020. At the time, Namoi Cotton stated that it was in discussions with its venture partner, Louis Dreyfus Company (LDC) about future funding possibilities.
The company revealed that it has received an extension on its banking facility with the Australia and New Zealand Banking Group (ANZ). The extension’s key terms and conditions, including limits, pricing, covenants, and undertakings, will mostly remain the same as before.
However, the facilities now comprise both an inventory and margin facility. Another exception is the addition of various new ANZ review events to the deal. ANZ has included review events, which are related to milestones in achieving the NCA joint venture restructure.
Terms of the ANZ facility extension require a prepayment of approximately A$12 million in margin facility by June 12, 2020.
In addition, Namoi Cotton has also announced the possibility of another facility extension, from its venture partner, LDC. LDC has agreed (albeit, in principle), to extend a facility of approximately A$11.2 million to NCA’s Trading & Marketing division.
The key terms and conditions, such as pricing, covenants, and undertakings, are still under discussion. However, Namoi expects that the facility extension will be finalised before June 12, 2020.
Both of these extensions to banking facilities will help to fund the overall restructure of the Namoi Cotton Alliance business.
Namoi Cotton’s shares have dropped 10 per cent this morning and are trading for 31.5 cents each at 10:12 am AEST.