Meat and pastry product company Canterbury Foods has told the financial markets that it is in discussions with third parties which may lead to the sale of one or more of its businesses. The company’s future depends on a deal to restructure bank debt, it said.
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Whilst these discussions have lead to offers being made, the aggregate value of these offers is materially below the current indebtedness of the company, it said. The marketing of these businesses has been extensive so that the directors do not consider it likely that significantly higher offers will now be received. Consequently, if all the company’s businesses were sold and the Company’s debts discharged there is almost no prospect of a surplus for shareholders.
The directors hope to be in a position to be able to announce the first disposal shortly, the company said. Completion of this proposed disposal would be conditional upon shareholder approval at an extraordinary general meeting.
The directors consider that the best prospects for the company are to retain one or more of its businesses and agree a restructuring of the remaining bank debt following completion of the first disposal. The bank has indicated that it will consider a proposal to restructure the bank debt following completion.
However there is no certainty that a restructuring can be agreed. In the event that terms for the restructuring of the bank debt cannot be agreed there is almost no prospect of the group continuing to trade in its current form or that there will be any residual value for shareholders.
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