Premier Foods plc has said it is continuing to “review” its future capital structure options and plans to update the market when it issues its full-year results, due out later this month.
A report in The Financial Times yesterday (2 February) suggested Premier was preparing a bond issue of about GBP400m (US$669m) to help tackle its debts.
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Premier is a highly-leveraged company, with net debt of around GBP890m and a pension deficit totalling GBP394.7m. The financial restructure is aimed at securing an investment grade rating by cutting its high leverage.
This morning, Premier issued a statement saying it “continues to review the options available to the group regarding its future capital structure” and “intends to update the market alongside the announcement of its full year results for the year ended 31 December 2013, which will be announced in due course”.
Analysts have repeatedly suggested that the firm could look to raise GBP300-400m through a rights issue.
“If Premier wish to normalise its capital structure a combination of debt refinancing and a rights issue are likely to be required,” Panmure Gordon analyst Damian McNeela wrote in a note to investors in January.
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By GlobalDataIn recent years, Premier has sold off assets and restructured parts of its business. At the end of January, the firm entered an agreement with US private equity firm Gores Group to establish its bread unit as a stand-alone joint venture. The transaction provided Premier a cash boost of GBP28m excluding fees.
