Australian Dairy Nutritionals Locks in $1.5M Loan to Fund FY26 Strategy
AHF secures $1.5 million loan facility to support FY26 strategy
Australian Dairy Nutritionals (ASX: AHF) has executed a $1.5 million secured loan facility with RELI Capital Ltd (formerly Gippsreal Limited), with funds directed toward working capital purposes across the Group. The facility was entered into on 20 May 2026 through the company’s wholly-owned subsidiary, Regen Properties Pty Ltd, acting as borrower, with AHF as guarantor. The Board of Directors has described the arrangement as providing “important funding and stability” for the Group to pursue its strategy for FY26 and beyond.
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Loan facility terms at a glance
The table below summarises the key commercial terms of the facility as disclosed in the ASX announcement.
| Term | Detail | Notes | Implication |
|---|---|---|---|
| Facility amount | $1.5 million (maximum) | Available for working capital use across the Group | Provides near-term liquidity headroom |
| Lender | RELI Capital Ltd (formerly Gippsreal Limited) | Third-party lender; not a related party or shareholder | Arms-length commercial arrangement |
| Term | 12 months from date of first drawdown | Drawdown must occur within four weeks of execution | Capital accessible in the near term, subject to conditions precedent |
| Interest rate | 9.74% per annum, variable, prepaid in advance | 12 months’ interest retained from initial drawdown; default rate adds +6.00% p.a. | Interest cost is front-loaded rather than paid periodically |
| Establishment fee | $24,750 (including GST) | Payable as a condition precedent to drawdown | One-off upfront cost to activate the facility |
| Loan to Value Ratio | Must not exceed 40% of market value of secured property during the term | Based on a satisfactory valuation of the Yaringa dairy farm | Conservative LVR cap limits exposure against the property asset |
| Security | First ranking charge over Yaringa dairy farm (Nirranda South) plus first ranking general security over Borrower’s assets connected to the property | Security documents must be registered prior to drawdown | Lender holds priority claim over nominated assets |
| Guarantor | Australian Dairy Nutritionals Limited (parent company) | Provides guarantee and indemnity for payment and performance obligations | Parent company stands behind borrower obligations |
A structural point worth noting: interest for the full 12-month term is retained from the initial drawdown rather than billed periodically. This is a standard prepaid interest structure for facilities of this nature and simply means the effective net drawdown will be slightly below the $1.5 million maximum.
What is a secured loan facility and why it matters for AHF investors
A secured loan facility is a borrowing arrangement backed by a specific asset, meaning the lender holds a claim over that collateral if the borrower cannot repay. In this case, the security is AHF’s Yaringa dairy farm in Nirranda South, which gives RELI Capital Ltd a first ranking charge over the property.
The interest rate on this facility is variable, meaning it is tied to a reference rate that can move over time rather than being fixed for the full term. At 9.74% per annum, it reflects current market conditions for secured commercial lending to small-cap borrowers.
Conditions precedent are a set of requirements that must be satisfied before funds can be accessed. Here, those include registration of security documents, a satisfactory property valuation, and payment of fees. Until these steps are completed, the facility is executed but not yet drawn.
For a vertically integrated dairy producer operating farms, a processing facility, and an infant formula brand simultaneously, reliable working capital access is a practical necessity. The 40% LVR cap is a conservative structural feature, indicating the Group is not over-leveraging against its property asset — a reassuring detail for investors assessing balance sheet risk.
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Funding runway and strategic context heading into FY26
This facility provides AHF with a defined 12-month funding window aligned to its FY26 operating plan. With conditions precedent being satisfied, the capital is expected to become accessible in the near term. Management has not specified which individual initiatives the funds will support beyond the stated working capital purpose.
To understand why access to this funding matters, it helps to consider the breadth of AHF’s operating base:
- Organic and organic A2 protein dairy farms in Southwestern Victoria
- An infant formula processing facility in Camperdown, Victoria
- The Ocean Road Dairies Organic A2 protein infant formula range, described as Australia’s first Organic A2 protein infant formula made with farm fresh Australian milk from the Group’s own organic dairy farms
Running this vertically integrated model across multiple sites and product lines demands continuous working capital to cover inputs, processing costs, and distribution expenses.
Board of Directors, Australian Dairy Nutritionals Limited
“The Loan Facility provides important funding and stability for the Group to pursue its strategy for FY26 and beyond.”
The $1.5 million facility does not represent a structural shift in AHF’s financing approach, but it does give the Group a clear financial platform heading into the second half of the calendar year. For investors, the combination of conservative security terms, a defined repayment horizon, and an arms-length lender provides reasonable transparency around the terms of this capital access.
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