Penford Corporation Expands Banking Credit Facility
October 10 2006 - 6:00AM
Business Wire
Penford Corporation (Nasdaq: PENX) today announced that it entered
into a $145 million credit facility on October 5, 2006 with several
leading commercial banks. This expanded facility increases the
Company�s available credit by $40 million to finance the previously
announced conversion of a portion of its existing manufacturing
facility in Cedar Rapids, Iowa, to ethanol production. The
five-year facility consists of a $60 million revolving line of
credit expiring December 31, 2011, a five-year $40 million term
loan, and a $45 million capital expansion loan commitment maturing
December 2012. The Company indicated that it would record a $0.6
million charge in the first fiscal quarter of 2007 for the write
off of unamortized transaction costs associated with the prior debt
facility. Penford announced in June plans to invest $42 million to
expand its Cedar Rapids, Iowa, site beyond starch to enable annual
production of approximately 40 million gallons of ethanol. The
Company expects the facility to begin producing ethanol by the end
of 2007. �With significant infrastructure already in place, Penford
is positioned well to realize increased shareholder value from
extending into ethanol production due to our lower cost-of-entry,
faster time-to-market, advantageous logistics and favorable
processing economics. This expanded credit facility provides the
financial support required to fund the ethanol initiative, as well
as to continue with plans to support growth in our food
businesses,� said Tom Malkoski, Chief Executive Officer. The
Administrative Agent for the new facility is Harris N.A. The
following banks also joined the facility: Australia and New Zealand
Banking Group, LaSalle Bank, Rabobank Nederland, and U.S. Bank.
Penford Corporation develops, manufactures and markets specialty
natural-based ingredient systems for various applications,
including papermaking, textiles and food products. Penford has nine
locations in the United States, Australia and New Zealand. The
statements contained in this release that are not historical facts
are forward-looking statements that represent management�s beliefs
and assumptions based on currently available information.
Forward-looking statements can be identified by the use of words
such as �believes,� �may,� �will,� �looks,� �should,� �could,�
�anticipates,� �expects,� or comparable terminology or by
discussions of strategies or trends. Although the Company believes
that the expectations reflected in such forward-looking statements
are reasonable, it cannot give any assurances that these
expectations will prove to be correct. Such statements by their
nature involve substantial risks and uncertainties that could
significantly affect expected results. Actual future results could
differ materially from those described in such forward-looking
statements, and the Company disclaims any intention or obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. Among the
factors that could cause actual results to differ materially are
the risks and uncertainties discussed in this release, and those
described from time to time in filings with the Securities and
Exchange Commission which include, but are not limited to,
competition; the possibility of interruption of business activities
due to equipment problems, accidents, strikes, weather or other
factors; product development risk; changes in corn and other raw
material prices and availability; changes in general economic
conditions or developments with respect to specific industries or
customers affecting demand for the Company�s products including
unfavorable shifts in product mix; unanticipated costs, expenses or
third party claims; the risk that results may be affected by
construction delays, cost overruns, technical difficulties,
nonperformance by contractors or changes in capital improvement
project requirements or specifications; interest rate and energy
cost volatility; foreign currency exchange rate fluctuations;
changes in assumptions used for determining employee benefit
expense and obligations; or other unforeseen developments in the
industries in which Penford operates. Penford Corporation (Nasdaq:
PENX) today announced that it entered into a $145 million credit
facility on October 5, 2006 with several leading commercial banks.
This expanded facility increases the Company's available credit by
$40 million to finance the previously announced conversion of a
portion of its existing manufacturing facility in Cedar Rapids,
Iowa, to ethanol production. The five-year facility consists of a
$60 million revolving line of credit expiring December 31, 2011, a
five-year $40 million term loan, and a $45 million capital
expansion loan commitment maturing December 2012. The Company
indicated that it would record a $0.6 million charge in the first
fiscal quarter of 2007 for the write off of unamortized transaction
costs associated with the prior debt facility. Penford announced in
June plans to invest $42 million to expand its Cedar Rapids, Iowa,
site beyond starch to enable annual production of approximately 40
million gallons of ethanol. The Company expects the facility to
begin producing ethanol by the end of 2007. "With significant
infrastructure already in place, Penford is positioned well to
realize increased shareholder value from extending into ethanol
production due to our lower cost-of-entry, faster time-to-market,
advantageous logistics and favorable processing economics. This
expanded credit facility provides the financial support required to
fund the ethanol initiative, as well as to continue with plans to
support growth in our food businesses," said Tom Malkoski, Chief
Executive Officer. The Administrative Agent for the new facility is
Harris N.A. The following banks also joined the facility: Australia
and New Zealand Banking Group, LaSalle Bank, Rabobank Nederland,
and U.S. Bank. Penford Corporation develops, manufactures and
markets specialty natural-based ingredient systems for various
applications, including papermaking, textiles and food products.
Penford has nine locations in the United States, Australia and New
Zealand. The statements contained in this release that are not
historical facts are forward-looking statements that represent
management's beliefs and assumptions based on currently available
information. Forward-looking statements can be identified by the
use of words such as "believes," "may," "will," "looks," "should,"
"could," "anticipates," "expects," or comparable terminology or by
discussions of strategies or trends. Although the Company believes
that the expectations reflected in such forward-looking statements
are reasonable, it cannot give any assurances that these
expectations will prove to be correct. Such statements by their
nature involve substantial risks and uncertainties that could
significantly affect expected results. Actual future results could
differ materially from those described in such forward-looking
statements, and the Company disclaims any intention or obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. Among the
factors that could cause actual results to differ materially are
the risks and uncertainties discussed in this release, and those
described from time to time in filings with the Securities and
Exchange Commission which include, but are not limited to,
competition; the possibility of interruption of business activities
due to equipment problems, accidents, strikes, weather or other
factors; product development risk; changes in corn and other raw
material prices and availability; changes in general economic
conditions or developments with respect to specific industries or
customers affecting demand for the Company's products including
unfavorable shifts in product mix; unanticipated costs, expenses or
third party claims; the risk that results may be affected by
construction delays, cost overruns, technical difficulties,
nonperformance by contractors or changes in capital improvement
project requirements or specifications; interest rate and energy
cost volatility; foreign currency exchange rate fluctuations;
changes in assumptions used for determining employee benefit
expense and obligations; or other unforeseen developments in the
industries in which Penford operates.
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