Spanish bakery group Panrico has temporarily suspended the pay of over 4,000 staff as it draws up a new business plan to stave off possible insolvency.

Panrico, owned by US private-equity firm Oaktree Capital Management, informed its workers of the measure earlier this week.

According to Spanish reports, the freeze on pay was needed to ensure commitments to suppliers were met, a memo from Panrico’s management said. When contacted by just-food, Panrico declined to comment

The company is understood to be putting together a continuation plan, which it plans to finalise within weeks.

Oaktree became Panrico’s sole shareholder this summer, increasing its stake from 86%.

In 2010, Panrico’s creditors took control of the heavily-indebted group. Since then, Oaktree has increased its stake in the company in stages by buying up Panrico’s debt.

Panrico has also restructured its industrial operations to reduce its cost structure, while also increasing its focus on value-added brands.