Farm Credit Canada has stepped in with a new financing package for B.C.-based greenhouse supply firm Bevo Agro Inc.
Bevo Agro propagates and supplies vegetable, flower, berry and other seedlings to greenhouse operators, field growers and nurseries, including a substantial customer base in the U.S. It posted a net loss of almost $280,000 in its fiscal year ending June 30, due to lower sales, the rising loonie and a write-off of bad debts, it said. It also owed $5 million, due at the end of January, on a convertible debenture it issued to a Vancouver private equity firm.
FCC’s new credit facility for Bevo Agro will total $24 million, the company announced Friday. It replaces the company’s $17 million in credit lines with BMO Bank of Montreal and will cover Bevo Agro to repay the $5 million debenture, which matured in September last year, owed to Vancouver’s Banyan Capital Partners.
FCC’s financing package includes a $2 million loan to be used for “general
agricultural purposes,” an $11 million term loan amortized over 20 years and an $11 million term loan amortized over 15 years, all with a five-year term, the company said.
BMO will continue to provide a $2 million operating loan facility for day-to-day operations. It will be secured in part by a $1 million cash deposit provided by Banyan, for which Bevo Agro will pay annual interest of 12 per cent, the company said.