The Australian food ingredients company Burns Philp, which almost collapsed under a mountain of debt in 1997, finalised its controversial A$240m (Euro140m) equity raising this month.
It restructured its $1.83bn (Euro1.065bn) debt into a five-year $900m (Euro524m) credit facility. In the company's annual report, Alan McGregor, Burns Philp's chairman said the equity raising and refinancing had significantly strengthened the group's balance sheet.
According to McGregor, Burns Philp is now in a sound position to grow its core yeast and bakery ingredients operations and continue its consolidation process. "Now that the financial reconstruction is complete, the group will be concentrating on improving its existing operations and realising growth," McGregor said in the report.
According to managing director Tom Degnan, the profit improvement initiatives, together with capital investments and the financial flexibility to undertake acquisitions, would lead to increases in earnings.
Degnan said Burns Philp's 7.7 per cent increase in net profit to $88.5m (Euro51.52m) for the year to June 30, 2001, was a good result under the prevailing condition in which the company operated.
He added that the group's prospects were positive after the completion of the equity raising and refinancing. "The initiatives implemented during the year helped to maintain profitability and continue to strengthen the platform from which the group can initiate future growth," he said.