The Tribune

By NEIL HARTNELL

Tribune Business Editor

AML Foods says its latest preference share restructuring has given it "a tremendous amount of latitude" to focus on growth opportunities, having raised a further $4.28 million in capital and reduced dividend (interest) payments on those instruments.

Gavin Watchorn said the seven-year extension of the preference share maturity date, from December 2015 to December 2022, combined with the 75 basis point dividend rate cut to 7.25 per cent, would free up further cash flow and give the BISX-listed food group a 'war chest' to focus on growth and acquisition opportunities.

An extra $4.28 million, raised from the sale of new Class B preference shares, a move that attracted an additional investor to join existing holders of this debt, will be used to finance the expansion of AML Foods' new franchise, the Carl's Jr burger chain.

Tribune Business understands that the extra capital raised, when added to the existing holdings, takes AML Foods' preference share financing to around $10 million. The BISX-listed food group is also thought to have $5 million in cash on the balance sheet, something that should show up in its January 31, 2012, year-end accounts.

Noting that there would be an interest savings to AML Foods, as a result of the dividend coupon's drop from 8 per cent to 7.25 per cent, Mr Watchorn told Tribune Business of the restructuring: "It provides a significant amount of long-term funding for us, so we can focus cash flow on continued growth rather than debt repayment.

"I think we've potentially put in the building blocks to propel this company forward, and now we have the resources to look seriously at any opportunities that may arise."

And he added: "We've basically structured our balance sheet to strengthen for the long-term, and pushing it out from 2015 to 2022 gives us a tremendous amount of latitude to channel cash flow into growth rather than debt repayment. Over the long-term, it will provide increased returns to our shareholders."

The new preference share agreement took effect as of January 1, 2012.