FINANCIALLY stretched Namoi Cotton has locked in another 12-month finance package with bankers ANZ and Rabobank and wants to have a joint venture partner on board by early 2013.
The renewed facilities, which cover Namoi’s $121 million debt exposure, will help underpin the company’s ginning and marketing business plan, including its key role in ginning this year’s record 4.4 million bale cotton crop.
Ginning has become the mainstay business for Namoi this season after the company took a big hit in volatile trading conditions last season, subsequently reporting a net loss after tax of $67.5m for the year to February 29.
Namoi expects to gin almost 1.4m bales this season. Last year it handled 1.3m.
Chief executive officer Jeremy Callachor said marketing was still a key element of the business but a big effort was being put into processing the crop.
With 11 of the company’s 12 gins operating at full staffing levels, the 2012 season’s operations had commenced in earnest and were already achieving throughput records at some sites.
About 40 per cent of this year’s cotton harvest has been completed in Queensland and NSW, with early fibre quality and yields proving encouraging despite difficult cloudy and cool conditions in summer.
Mr Callachor said this week’s new financial facilities would support “the successful progression of Namoi’s business strategy” to cut its debt exposure to $60m by next February.
“Namoi cotton continues to service and meet all debt repayment and amortisation obligations,” he said.
The search for a cornerstone investment partner was continuing to make headway with a number of parties involved in preliminary talks, including internationally-backed investors.
“The capital raising process is progressing in accordance with expectations,” Mr Callachor said.
“It’s hard to give any indication about how long it will take to finalise an agreement, but we’d like the partnership in place prior to the new trading year (which starts in March).”
ANZ Corporate is acting for Namoi in the capital raising process.