Tirlán has announced a process to close out its €250 million exchangeable bond by buying it back and cancelling it through the sale of 17 million shares it currently holds in Glanbia plc.

The co-op issued €250 million in five-year secured exchangeable bonds in January 2022 as a low-interest, equity-linked instrument which allowed the co-op to borrow against its shareholding in Glanbia while retaining ownership and dividend rights.

Tirlán said the bond provided valuable funding at a "very competitive interest rate" of 1.875% to enable the co-op to acquire full ownership of what is now Tirlán (prior to this, suppliers' milk was processed by Glanbia Ireland, before Glanbia co-op purchased full ownerships of the milk processing business and became Tirlán).

In order to fund the buyback the bond, the co-op will place 17 million shared in Glanbia plc with institutional investors, a process which is now being launched.

Tirlán intends to use the entire proceeds from this share placement for the concurrent repurchase of its outstanding €250 million exchangeable bond.

Tirlán will issue an invitation to holders of outstanding bonds for such bonds to be repurchased and cancelled by the co-op.

The shares being places represent around 7% of Glanbia plc's share capital.

According to Tirlán, Glanbia plc has confirmed that, in line with the latter's policy of repurchasing its own shares, it wishes to take part in the share placement by placing an order for up to 45% of the placed shares (capped at €100 million).

Any shares acquired by Glanbia plc in this process will be cancelled.

Assuming all of the intended 17 million shares are placed, Tirlán will then hold 17.8% of Glanbia plc's issued share capital at the end of the process.

Tirlán will remain the largest equity investor in Glanbia and "continues to be a strong supporter of its strategy", the co-op said.