h maker of Mr Kipling cakes and Hovis bread, Premier Foods, has revealed plans to bolster its finances with a £1.1 billion restructuring package. The St Albans-based company said that it will tap investors under a £353 million cash-call, while also raising another £475 million through a corporate bond issue to help tackle its £831 million debt pile and secure a new £300 million lending arrangement.
It has also agreed a more affordable funding plan for its staff pension scheme as it seeks to fill a £603 million deficit, which will see it pay reduced contributions over the next six years.
Chief Executive Officer Gavin Darby is quoted by Bloomberg Businessweek as saying “we can now draw a line in the sand on six years of challenging capital restructuring,”
“When we work our way through this, we will have nailed the capital structure,” he said.
The debt of the Bisto gravy maker peaked at about £1.8 billion in 2008 after a series of highly leveraged acquisitions.
The group has been selling off food businesses to focus on its seven core grocery brands, and sold a stake in its Hovis bread business to US based Gores Group earlier this year.
As well as the financing deal, the food group posted a 12.3% fall in 2013 trading profit to £139.5 million but said its core brands achieved 2% sales growth.
Shares at Permier Foods were down 4% this morning.
