Heileman Seen As Separate from Troubled Parent, Bond Corp.
LA CROSSE, Wis. (AP) _ G. Heileman Brewing Co. is reporting higher operating income for the first half of its fiscal year and is working with its banks on possible ways to modify its debt structure, a top Heileman official said Wednesday.
Operating income for the first half of the brewery’s fiscal year far exceeds last year’s results, said President Murray Cutbush in a news release in which he tried to put some distance between Heileman’s financial condition and that of its parent, Bond Corp. of Australia.
At the same time, he said the brewery is ″working closely with its banks in reviewing a number of additional alternatives aimed at favorably modifying Heileman’s existing debt structure.″
Heileman’s bankers in the United States have granted modifications and waivers to the brewery’s revolving credit agreement, Cutbush said. Those changes allow Heileman the required flexibility to achieve its operating goals and improve its overall financial position, he said.
″Heileman’s focus remains on core brand profitability,″ Cutbush said. ″This strategy is now paying dividends which are reflected in our bottomline results. At a time when Heileman is coming into its own, it’s unfortunate that unrelated issues are clouding the gains that we’ve achieved.″
Cutbush said Heileman is a stand-alone operation, with financing independent of Bond Corp., headed by Alan Bond.
Bond lawyers are fighting an effort to have the company’s Australian brewing interests placed in receivership. The National Australian Bank, which has loans to Bond Corp., requested the action.
Cutbush noted the moves involving the Australian brewing operations do not have a direct affect on Heileman operations.
He added that an interest payment due in the United States from Bond - a payment that reportedly has been delayed - is not associated with Heileman.
La Crosse-based Heileman’s financial arrangements contain no ″cross- fault″ clauses that could be triggered as a result of the receivership action in Australia against Bond Brewing Holdings Limited, a subsidiary of Bond Corp., Cutbush said.
Cutbush said Heileman’s ″strong financial performance″ so far this fiscal year results in part from price increases implemented last year, continuing emphasis on core brands, savings from lower agricultural costs, reduced capacity and lower general and administrative costs associated with the company’s regional operating structure.
″We’re now seeing the results of those critical programs implemented in 1989. They’ll continue to produce the kind of fiscal gains we’ve already seen in the first half of this fiscal year,″ Cutbush said.
Bond purchased Heileman for about $1.3 billion in 1987, then sold off the Heileman Baking and Machine Products Co. subsidiaries to reduce debt.