One51 plans to raise €100m in funding

One51, the former IAWS Co-op, is planning to raise €100 million and open itself to unconnected shareholders for the first time.

The company, headed by former IAWS plc chief executive and chairman Philip Lynch, is expected to issue documentation on the fund-raising over coming weeks.

A convertible loan note will be offered to both individual farmer members of the co-ops that are already shareholders in One51 and to private investors who have no current or historic connection to the business.

This latter move marks a major shift for One51, which provided the roots for IAWS plc, the listed agribusiness group.

The farmers that will be entitled to participate will be drawn from co-ops such as Dairygold, Kerry and Glanbia.

The note will carry an interest-bearing coupon of between 3 and 4 per cent.

Under the terms of the offering, those who sign up will be able to convert their holding into equity after four years. If they prefer, they can wait until year six to convert.

The conversion will come at a discount of 20 per cent to today's market value for One51, which is about €310 million.

All the main Irish stockbroking houses are expected to offer their clients the opportunity to invest in the structure.

It is unclear at this stage how One51 plans to use the funds due to be raised in the offering, but the firm is likely to cite expansion plans when marketing the note to potential investors.

A €100 million injection would significantly add to One51's valuation before a flotation. The company has been earmarked for a possible initial public offering at the end of this year or the start of 2007. The forthcoming fund-raising will be One51's second such effort this year, with the company having raised more than €50 million from shareholders, management and staff in a convertible note in January.

That note also offered a discounted conversion option, but this was based on a much lower valuation for One51 as a whole. At that stage, the company was valued at roughly €200 million.

Much of the increase in value in the meantime is due to One51's 26 per cent shareholding in utilities company NTR. This holding was worth about €233 million yesterday.

One51 holds assets in a number of areas but the firm's principal interests for expansion lie in waste management and renewable energy.

Most recently, it combined with partners to spend €10 million on the development of a Waste Electrical and Electronic Equipment Processing Plant in Dublin through its subsidiary, TechRec.

The initial TechRec investment came last August, with One51 holding a controlling interest. One51's other assets include full ownership of the Irish Pride bakery and a 50 per cent stake in Greenore Port in Co Louth.

A €64 million deal to take over Cork-based SWS ran aground last September.