The Zurich-based chocolate giant, the world's leading manufacturer of high quality cocoa and chocolate products, has undertaken a number of recent acquisitions, and this latest move could provide the necessary stability for further growth.
The agreement, signed with a group of 15 different banks, is split into three separate parts, the first of which is a €435 million revolving credit facility for the next five to seven years.
The other two parts comprise a €250 million backup for the company's already existing commercial paper programme and a €165 million refinancing of its high yield bond that starts in 2007.
The new deal is particularly beneficial as it will reduce payments on the firm's high yield bond by 14 million CHF a year. A positive response from the banking market has enabled them to extend their facility €110 million above what the firm originally intended, and could be used to fund further growth.
"The new agreement is a milestone in our commitment to strengthen our balance sheet and will greatly enhance our financial security," said Barry Callebaut CFO Dieter Enkelmann.
The company is certainly in a strong position. Since moving from Adecco, CEO Patrick de Maeseneire has revitalised Barry Callebaut's chocolate production and strengthened the group's overall operations in both Asia and the USA.
Asia is now Barry Callebaut's fastest growing market, and further development looks likely since the opening of a factory in Singapore in 1997 and a sales office in Tokyo in 2004. The firm has also begun supplying chocolate to a number of speciality chocolatier boutiques throughout Japan.
The new financial arrangement could also be used to help stabilise operations closer to home. The company has spent $225 million this year on struggling German firm Stollwerk and refocused its output around the Sarotti brand.
The purchase of Brach's, the sixth biggest American chocolate company, has enabled the Sarotti brand to be expanded in the USA and may well be behind the recent announcement of doubling production capacity in Ghana. Another key feature of Barry Callebaut's future may lie in their patented production of chocolate containing antioxidants, a sector that is likely to become increasingly lucrative in a health obsessed world.
It is clear that whatever the future holds for Barry Callebaut, the international arean will play an increasing important role. Following rumours that he was in the market for a premium brand such as Belgium's Neuhaus, Maeseneire revealed that "we don't want to be a European company only. We want to be a global company".