EAL OF THE MONTH
WHAT'S NewS Issue 4 April 1997
info exchange
15
In our deal of the month, close teamwork resulted in a
private placement of cumulative preference shares
amounting to NLG 1 50 million with five leading Dutch
financial institutions. Proceeds were used to redeem part of
the long term subordinated shareholder loans provided by
international investors on the formation of Nutreco in
1994, strengthening Nutreco's balance sheet considerably.
Bargmann, Henk Buitenhuis
and Jacob van Dijk (Corporate
Banking), Paul Michielsen and
Rutger Brascamp (Financial
Markets), Kees Versteeg and
Simone Blommestijn (legal
department), Jaap Willems and
Cees Rombouts (tax
department), Carola Oomen
and Robert Jan De Clerq Zubli
(Rabobank Trust Company),
Miriam van Dongen (IRIS
Research), Harry Wolting
(credit analysis), plus Henk
Visser (Executive Board).
Nutreco is an international
group of companies with
annual sales exceeding NLG
4.5 billion and leading
positions in the high quality
animal feed industries. The
group's main activities are
concentrated on the
production of compound feed
and salmonid fish feed.
Together with activities such as
the production of premixes
and speciality feed, poultry
and pig processing, plus
livestock breeding and fish
farming, the company is
divided into two business
groups: Nutreco Agriculture
and Nutreco Aquaculture.
The company, headquartered
in the Netherlands, operates
more than 60 production and
processing plants in over
15 countries.
Nutreco was formed as part of
the buy-out of the core
businesses of BP Nutrition in
October 1994. Although
Nutreco has a relatively short
history, many of its businesses
can tracé their heritage back
nearly half a century.
As an independent group of
companies, the highest priority
in the first years has been given
The deal-, refinancing
subordinated shareholders
through the issuance and
placement of (tier-1)
cumulative preference shares.
The cliëntThe Dutch-based
Nutreco, a leading player in
the world agriculture and
^quaculture markets.
The playersDominique Bech
and Marianne Schoemaker
(Rabo Securities), Robin
looking ahead")-
April Publication Fresh
Fruit Study
May
7-9 VIV Latin America,
Sao Paulo
22-23 UNICO Conference,
Maastricht
June
^2-3 Export Finance
Seminar, New York
9-14 Teamdays APFT,
Holland
25-27 IAMA Congres,Jakarta
to streamlining the activities
and optimizing the synergies
between the different group
companies. Much progress has
been made. The company has
focused on further
strengthening its market
leadership, whilst fine tuning
its organizational structure and
at the same time increasing its
operational and financial
efficiency.
The company was profitable
from the start, thanks in part
to the healthy geographic and
functional spread of its
activities. Strong cash flow
performance in 1995 enabled
Nutreco to replace the original
buy-out facility in January
1996 with new loan facilities,
resulting in significantly lower
borrowing costs and a stronger
financial position.
The next and more recent step
involved strengthening
Nutreco's equity base. In mid-
1996, Nutreco selected Rabo
Securities from among four
contenders to engineer its
further financial restructuring.
This was Rabo Securities'
transaction. It was also the
result of cooperation and
initiative within the bank - a
level of teamwork that is the
hallmark of our operating
style. Our colleagues in
Financial Markets introduced
us to a handful of high-profile
investors. Next, the Rabobank
Trust Company formed a
special purpose company to
invest in the cumulative
preference shares that would
replace the subordinated
shareholders loans. The
ordinary shares from the
special purpose company were
placed with the financial
institutions. This structure
made it possible for the
financial investors to
participate in the deal,
benefiting from a dividend
withholding tax exemption.
'Our colleagues in the tax and
legal departments at Rabobank
Nederland, in close
conjunction with their
counterparts at Nutreco, were
able to negotiate a unique
advance ruling by the tax
inspectorate which guaranteed
that all potential investors
could benefit from this
exemption,' explains
Dominique Bech.
'This advance ruling was really
quite unusual,' Bech notes;
'Any number of cum prefs are
issued in Holland every year,
but this is the first time that
the fiscal implications have
been agreed ahead of time.'
The teamwork resulted in a
private placement of
cumulative preference shares
amounting to NLG 150
million with five leading Dutch
financial institutions:
Rabobank International, Fortis
Investments, ABN AMRO
bank, Nationale Nederlanden
and De Nationale
Investeringsbank. The
proceeds were used to redeem
part of the long term
subordinated shareholder
loans provided by
international investors on the
formation of Nutreco in 1994.
The NLG 122 million
remainder of the shareholders
loans have been converted into
another class of cumulative
preference shares. The
refinancing has strengthened
Nutreco's balance sheet with a
total of NLG 272 million of
new equity, which has reduced
the apparent gearing and
reduced the cost of capital by a
further NLG 5 million per
annum.
DEAL
VAN DE
MAAND
Nauwe
samenwerking binnen de
Rabobankorganisatie heeft
geresulteerd in de plaatsing
van 150 miljoen gulden aan
cumulatief preferente aandelen
van Nutreco bij vijfgrote
Nederlandse financiële
instituten. Met de opbrengsten
kon de balans van Nutreco
aanzienlijk worden versterkt.
