Sale of Non-United States Accounts Receivable

12 Months Ended

Oct. 31, 2019

Receivables [Abstract]

Sale of Non-United States Accounts Receivable

SALE OF NON-UNITED STATES ACCOUNTS RECEIVABLE

In 2012, Cooperage Receivables Finance B.V. (the “Main SPV”) and Greif Coordination Center BVBA, an indirect wholly owned subsidiary of Greif, Inc. (“Seller”), entered into the Nieuw Amsterdam Receivables Purchase Agreement (the “European RPA”) with affiliates of a major international bank (the “Purchasing Bank Affiliates”). On April 17, 2019, the Main SPV and Seller amended and extended the term of the existing European RPA through April 17, 2020. On June 17, 2019, the Main SPV and Seller entered into an agreement to replace the European RPA with the Nieuw Amsterdam Receivables Financing Agreement (the "European RFA"). The European RFA provides an accounts receivable financing facility of up to €100.0 million ($111.1 million as of October 31, 2019) secured by certain European accounts receivable. The $96.4 million outstanding on the European RFA as of October 31, 2019 is reported as long-term debt in the consolidated balance sheet because the Company intends to refinance these obligations on a long-term basis and has the intent and ability to consummate a long-term refinancing by exercising the renewal option in the respective agreement or entering into new financing arrangements.

During the first quarter of 2019, a parent-level guarantee was added to the European RPA and Singapore RPA (as such term is defined below). During the third quarter of 2019, in conjunction with execution of the European RFA, the parent level guarantee was removed for the European RFA. The $1.9 million outstanding on the Singapore RPA as of October 31, 2019 is reported as short-term debt in the consolidated balance sheet because the agreement expires in 2020 and will not be renewed.

Under the previous European RPA, as amended, the maximum amount of receivables that could be sold and outstanding under the European RPA at any time was €100 million ($111.1 million as of October 31, 2019). Under the terms of the European RPA, the Company had the ability to loan excess cash to the Purchasing Bank Affiliates in the form of the subordinated loan receivable.

Under the terms of the previous European RPA, we had agreed to sell trade receivables meeting certain eligibility requirements that the Seller had purchased from other indirect wholly-owned subsidiaries under a factoring agreement. Prior to November 1, 2018, the structure of the transactions provided for a legal true sale, on a revolving basis, of the receivables transferred to the

respective Purchasing Bank Affiliates. The purchaser funded an initial purchase price of a certain percentage of eligible receivables based on a formula, with the initial purchase price approximating 75 percent to 90 percent of eligible receivables. The remaining deferred purchase price was settled upon collection of these receivables.

In October 2007, Greif Singapore Pte. Ltd., an indirect wholly-owned subsidiary of Greif, Inc., entered into the Singapore Receivable Purchase Agreement (the “Singapore RPA”) with a major international bank. The maximum amount of aggregate receivables that may be financed under the Singapore RPA is 15.0 million Singapore dollars ($11.0 million as of October 31, 2019).

Under the terms of the Singapore RPA, the Company has agreed to sell trade receivables in exchange for an initial purchase price of approximately 90 percent of the eligible receivables. The remaining deferred purchase price is settled upon collection of those receivables.

Prior to November 1, 2018, the Company removed from accounts receivable the amount of proceeds received from the initial purchase price since they met the applicable criteria of ASC 860, “Transfers and Servicing,” and the Company continued to recognize the deferred purchase price in other current assets or other current liabilities on the Company’s consolidated balance sheets, as appropriate. The receivables were sold on a non-recourse basis with the total funds in the servicing collection accounts pledged to the banks between settlement dates. The cash initially received, along with the deferred purchase price, related to the sale or ultimate collection of the underlying receivables and was not subject to significant other risks given their short-term nature. Therefore, the Company reflected all cash flows under the accounts receivable sales programs as operating cash flows on the Company’s consolidated statements of cash flows.

The Company performs collection and administrative functions on the receivables related to the European RPA, the European RFA and the Singapore RPA (collectively, "Foreign Receivables Facilities"), similar to the procedures it uses for collecting all of its receivables. The servicing liability for these receivables is not material to the consolidated financial statements.