Barry Callebaut’s €2 billion ($2.31bn) borrowing-base facility therefore deserves to be viewed through a wider lens: financing the cocoa cycle has become a strategic issue for the industry.
A legal update published on 3 August confirmed that law firm Linklaters advised Barry Callebaut on its inaugural €2 billion sustainability-linked revolving borrowing-base facility, including a €250 million swingline. The facility is secured against inventory in Belgium, France, Germany, the US and Canada.
The financing itself was completed on 13 April . Barry Callebaut previously disclosed that it comprises €1.6 billion of committed funding and a further €400 million uncommitted tranche.
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That timing is important. This is not a fresh €2 billion capital raise in August. The significance lies in how Barry Callebaut has redesigned part of its financing architecture following an extraordinary period of cocoa-price volatility.
Financing The Cocoa Cycle
The mechanism is relatively straightforward.
When cocoa prices rise sharply, processors need considerably more cash to finance the same physical quantity of beans and cocoa products. Even where higher input costs are eventually passed through to customers, the processor must finance inventory while cocoa moves through procurement, processing and sales.