Dairygold Revolving Fund contributions to be repaid by next week

Dairygold has announced that its co-op members will receive repayments from the Dairygold Revolving Fund by no later than the end of next week.

Back in April of this year, the southern-based cooperative revealed that the “repayment of the revolving fund will commence in 2020 where the society will repay €4.2 million to members including interest of €0.6 million”.

In a statement today, Thursday, August 6, a spokesperson for Dairygold said:

“The revolving fund contributions received from milk suppliers in 2013, matured on Friday, July 31, 2020, after accumulating interest of 2.5% plus three-month EURIBOR [Euro Interbank Offered Rate], as applicable per annum, applied up to Friday, July 31, 2020.

The 2013 revolving fund contribution will be repaid no later than Friday, August 14.

This year will also see the society repay the final loan notes, worth €700,000, to co-op members.

However, this has drawn ire from some Dairygold suppliers. Speaking to AgriLand, one supplier stated that, as of June 10, the co-op had issued a letter stating that repayments would be made on July 31, with no mention of “maturing” at this date.

A second supplier said: “We had written correspondence that the revolving fund would be paid by July 31.

Personally, I was depending on the payment and had a loan payment returned unpaid [to] the bank on account of this.

“It is my credit rating that will suffer; I don’t think Dairygold would be as casual if the payment was due to it,” he added.

What is the Revolving Fund?

In January 2013, the co-op introduced the Dairygold Revolving Fund, as part of efforts to raise money to invest in expanding its facilities to cope with dairy expansion following the expected abolition of quotas in 2015.

Member funding was introduced in 2013 as part of the society’s overall funding strategy to support the delivery of its business growth ambitions.

According to Dairygold’s annual report for last year, total member funding (including accrued interest) at year-end 2019 was €24.2 million. This is made up of €700,000 in loan notes and €23.5 million in the revolving fund. Revolving fund contributions ceased last year following the cessation of the scheme.

Under the revolving fund, members’ contributions were deducted from milk payments on a monthly basis at 0.5c/L on all milk supplied in the month when the Dairygold quoted milk price was at 27c/L including VAT or greater.

The first 75,000L of milk supplied each year was exempt under the scheme, with contributions capped at a maximum of 60 society monthly deductions, equivalent to five years.