Westland's latest annual report noted cash flow for the year was below expectations, its milk payout to farmers was not competitive and "obtaining new capital would make a significant difference to the co-operative".
The company's chief financial officer at the time of the loan announcement, Dorian Devers, told the Herald "the terms are attractive to us".
"We could have financed this in other ways but the terms we have been given from the PGF are more favourable. It's a longer-term loan than we can get from a bank which is nice," said Devers, who has since left the company.
Westland was paying 2.57-3.49 per cent on its existing debt.
News of the PGF loan was criticised by dairy industry participants and economist Cameron Bagrie.
One industry competitor who declined to be named said it was "bizarre" the Government would support a flagging company for an amount that was "not material" while others with strong balance sheets applied to their banks for finance while making their own success in the $14 billion New Zealand dairy export industry.
Bagrie said the loan set "a dangerous precedent" and appeared to be corporate welfare.
His view was generally supported by other business observers approached for comment.
However, privately, the chairman of a successful listed company said the idea of applying for a PGF loan, if the commercial terms were favourable, was no different to applying for other state grants. He did not dismiss the Government's part in business development so easily.
Regional economic development minister Shane Jones who announced the loan did not respond to an approach for comment on MBIE's continuing refusal to release the commercial terms.
At the time Jones said the loan, part of a $140m PGF support package for the West Coast, was "classic economic development" for a neglected region, took a swipe at "Aussie" banks, and accused critics of a double-standard.
He accused banks of not "giving a fig" in relation to jobs saved, strengthened infrastructure and economic development.
Asked if he was aware of Westland Milk Product's financial performance, Jones at the time said he didn't want to comment specifically on the company.
"But I would say it is an enterprise based in a part of New Zealand that is going through a challenging transition - GDP is substantially reduced, legacy industries are being closed down. I'm part of a Government trying to introduce capital to help them in this transition."
He noted 47 officials were involved in administration of the PGF, and its appraisal committee had eight independent members, with delegated Cabinet ministers having the final sign-off of application recommendations.
Westland Milk Products is a farmer-owned co-operative, which can trace its business legacy in the isolated region back 150 years. It employs 430 people.
In the 2018 financial year, it had 429 milk suppliers, down from 435 in 2017.
Revenue in 2018 was $693m, compared with $630m in 2017, and $588m in 2016.
Westland's total equity at the time the loan was announced was $232m.
Its total long-term borrowings were $232m.
Westland's 2018 annual report said the value of its tangible assets was $571m. The report said tangible asset value drove the company's tangible net worth calculation "which must be maintained above 37.5 per cent to comply with banking covenants".
Then-chief financial officer Devers said the current bank covenant compliance level was confidential.
"I can tell you it's above where it needs to be."
Westland's need to change its capital structure was discussed at its December 5 annual meeting, after the Government loan was announced.
It was closed to all but farmer-shareholders.
In a subsequent statement, the company said its capital structure review had attracted a number of proposals from interested parties.
Chairman Pete Morrison said on the strength of the indicative proposals, the board would go to the next step of the review process.
There would be an update in March. No further information would be provided until then.
Why the loan?
The loan, which will help build a new plant for higher-value dairy product manufacturing, is part of a $140m regional economic development package for the West Coast, which will come out of the Government's $3 billion Provincial Growth Fund.
Why no bank?
The company said it could have financed this amount through other means but the terms of the PGF loan were "more favourable".
What are the terms?
We don't know because the business ministry, MBIE, which oversees the PGF, says they are still confidential as negotiations are ongoing. Westland has said it was happy to disclose loan details but MBIE said not to.
