UK: Premier "hopes to raise GBP1bn" in new capital
Premier has reportedly drawn up plans for GBP1bn rights issue
Premier Foods plc, the indebted UK food maker, is reportedly aiming to raise GBP1bn through new loan agreements and a rights issue.
A spokesperson for the group declined to comment on the suggestion. However, Premier's well-documented financial issues have prompted some City analysts to insist the group requires a capital injection to bolster its balance sheet.
According to Sky News, Credit Suisse, HSBC and Jefferies have been appointed to underwrite a rights issue that will raise roughly GBP350m (US$376.4m) after expenses.
The report suggests the three banks will be required to "show their commitment" to the plan by agreeing to "make their own balance sheets available" to Premier. Jefferies, for instance, is expected to provide a loan of around GBP25m as part of a new debt facility valued at GBP250m.
Premier's net debt totals around GBP890m and the group has a pension deficit of GBP394.7m.
Earlier this week, the maker of Oxo stock cubes and Mr Kipling cakes announced it will run its bread business as a stand-alone joint venture with private-equity firm Gores Group. The deal will provide Premier with proceeds of almost GBP30m, which it said it would reinvest in its core grocery brands.
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