AG BARR is taking on a new £15 million debt facility to help pay for a factory which is crucial for its growth strategy in southern England.

The soft drinks maker has now decided to buy the land at Milton Keynes rather than lease it, which will mean an investment of around £41.5m.

An unnamed bank is provid- ing the debt for the project, with the balance to be funded from existing AG Barr resources.

Net debt was £6.7m at the end of the most recent financial year, while there was free cashflow of £20.2m.

While the company declined to specify which bank it had agreed a facility with, it did confirm it was not existing lender Royal Bank of Scotland.

The 12.7-acre Milton Keynes site, around 50 miles north of London, will be used to produce all the company's brands, including Irn-Bru and Rubicon, and serve a growing customer base in the south of England.

Sales in England and Wales were up 8.4% last year against a 3.4% rise in Scotland. The new factory is expected to open around the third quarter of next year and initially canned drinks will be made there, with plastic bottles coming later.

It will not affect the manu-facturing operations at AG Barr's Cumbernauld headquarters.

The company, headed by chief executive Roger White, also announced it has tied up a 15-year extension to its franchising agreement for the Rockstar energy drink.

Marketed as the world's most powerful energy drink, it has a caffeine content of 32.1 milligrams of caffeine per 100 millilitres.

AG Barr, which was hosting a presentation for stock market analysts yesterday, said it was "very happy" with how the brand was performing.

It added: "This amendment to our existing agreement will extend the current contract through to 2024, further cementing the strong relationship between the two companies and highlighting the future growth potential of the Rockstar brand in the UK."

The initial distribution deal with United States business Rockstar Inc, based in Las Vegas, Nevada, was signed in 2007.

In its annual report, AG Barr said sales of Rockstar in the UK and Ireland increased 18.7% in 2011, which was ahead of the 16.4% growth experienced in the carbonated energy drink market.

AG Barr also said that it would fight to protect its brands in a legal case brought against it in Russia.

A company called Business Investment Group Holdings is bidding to cancel various trademarks for Irn-Bru and end the protected status of the brand in a case at Moscow Commercial Court.

A spokesman for AG Barr said: "The company will vigorously defend and protect its brands.

"We believe the allegations are totally without foundation."

In the 12 months to January 28 this year, AG Barr reported a 6.6% rise in sales to £237m, with pre-tax profits increasing from £30.4m to £35.4m.

Sales in the 14 weeks to May 5 this year increased 4.3%, although the rising cost of raw materials such as sugar saw gross margins drop slightly.

The next trading update is due for the end of July.