WISBECH: Food firm seeking to refinance, reports claim
BRITAIN S biggest food firm, which employs more than 1,000 people across the Fens, is seeking to refinance it was reported.Premier Foods, which makes household names like Branston pickle, Hovis bread, Mr Kipling cakes and Bisto, was said to be working to
BRITAIN'S biggest food firm, which employs more than 1,000 people across the Fens, is seeking to refinance it was reported.
Premier Foods, which makes household names like Branston pickle, Hovis bread, Mr Kipling cakes and Bisto, was said to be working to secure a major capital injection worth several hundred million pounds.
Premier, which has debts of £1.8 bn, was claimed to be in detailed talks with CCMP Capital, formerly the private equity arm of JP Morgan.
The Sunday Telegraph said the company had turned to prospective investors because the current climate made it difficult to refinance existing debt.
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The move would enable it pay down some of the debt pile.
Premier once ran King's Lynn's iconic Campbell's Soup factory until the plant was closed down in a restructuring last year.
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It still employs more than 700 in Wisbech, where it has factories producing baked beans, ready meals and tinned pulses; along with three distribution centres.
Premier also owns Marlow Foods in Methwold, where more than 400 are employed making the meat substitute Quorn; a distribution centre employing around 20 people at Clenchwarton, near King's Lynn, and the Hovis Bakery at Mendlesham, near Stowmarket, which has 60 employees.
There was no suggestion any jobs were at risk. With more than 18,000 staff, Premier, based at St Alban's, is one of Britain's biggest employers.
The company's share price has fallen sharply amid concerns about the level of debt on its balance sheet after recent mergers with RHM and the UK arm of Oxo and Homepride company Campbell's Soup.
The impact of higher commodity prices on its working capital, and lower proceeds from property sales have also impacted on the debt position.
However, the group said in July that it met its financial covenant tests at the end of June and that it expects to continue to operate within them.
Premier's board is said to believe that a reduction in its debt burden would allow the City to re-rate it shares at a time when defensive stocks such as food companies are likely to find more favour among nervous investors.
A report said a deal with CCMP could yet be abandoned in favour of another option, such as asset sales or an investment from another party. Lion Capital, a former owner of Premier, Kohlberg Kravis Roberts and Permira are among the other private equity options.