The Big Food Group (BFG), the UK frozen food retailer formerly known as Iceland, yesterday [Tuesday] made an optimistic statement on its recovery strategy when it reported its had secured a much-anticipated refinancing package as well as announcing an improvement in trading.
The group’s share price soars climbed 18% to £101.75 (US$148.54) on the news that it is raising £129m from the sale and leaseback of 31 stores to French insurance group AXA. BFG has also secured a further £300m debt facility with Barclays bank and the Royal Bank of Scotland. It intends to raise an additional £150m from the sale of high yield bonds.
The group’s net debt curve is also showing a downward trend, falling to £366m by 10 May compared with £404m on 29 March. Trading is ahead of forecasts, with like-for-like sales for the six weeks to 10 April up 0.1% on the comparable period in 2001. The rise in sales has been driven by special promotions such as meal deals and new ranges.