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One company - one financing (pdf)

Today, Marel signed an agreement with a group of six international banks on long-term financing in the amount of EUR 350 million. The initial average interest terms are EURIBOR/LIBOR + 320 bps and will decrease during the maturity of the loans, in line with the expected increase of the financial strength of Marel.

In Marel’s view, the new financing structure is a major milestone and provides the company with a strong foundation for the future. The agreement enables the company to refinance all its existing debts at favourable terms and conditions. Equally important, it supports the company’s long-term strategy by providing the stability and flexibility needed to continue to grow the business, as well as making the full integration of the company’s operations possible.

Six international banks, led by ING Bank (which acted as the Coordinating Bookrunner), Rabobank and ABN AMRO (which acted as joint bookrunners), have provided Marel with a single financing package consisting of credit facilities amounting to EUR 350 million, to be drawn in currencies reflecting the company’s revenues and assets. The key elements of the financing are:

• A five-year senior club loan and revolver, consisting of a EUR 135 million and a USD 115 million term loan and EUR 100 million multicurrency revolver, with final maturity in November 2015. Initial interest terms are EURIBOR/LIBOR + 300 bps, which are expected to decrease during the maturity of the loan.
• A junior club loan in the amount of EUR 30 million, with a six year maturity that can be converted into senior ranking subject to the company’s financial performance. Initial terms are EURIBOR/LIBOR + 500 bps.
• Terms and conditions are in line with Loan Market Association (LMA) corporate standards.

Theo Hoen, CEO:
“We are grateful for the trust shown by the club of leading international financial institutions. They share our view that the long-term prospects of our business are favourable. With stable and cost-efficient new financing, we can now move forward and focus on growing our business and capitalizing on our operational leverage.”

Arni Oddur Thordarson, Chairman of the Board:
“We are proud of what our management and 3,500 employees have achieved. At the 2006 Annual General Meeting, we introduced a two-phase growth strategy outlining how we intended to lead our industry on a global scale with a 15-20% market share in 10 years time. The financing introduced today completes the first phase, which consisted of transformational acquisitions, integration and refocusing of the business. Now we formally enter the second phase with the main emphasis on creating value through strong internal growth fuelled by innovation, further market penetration and operational excellence.”

Meeting to present new financing structure, 26 November 2010

Marel invites market participants, investors and media to a meeting where the new financing structure will be introduced. The meeting will take place at the Hilton Reykjavik Nordica Hotel on Friday, 26 November, at 11:30 a.m. The presentation will be made by Erik Kaman, CFO, and Sigsteinn P. Gretarsson, Managing Director of Marel ehf. Arni Oddur Thordarson, Chairman of the Board, will also address the meeting.

A light lunch will be served.

For further information, please contact:
Jon Ingi Herbertsson,
Investor and Public Relations Manager,
jon.herbertsson@marel.com,
tel: (+354) 563-8451