Premier Foods plc, the UK’s largest food group, today (5 March) unveiled its long-awaited plan to reduce its hefty debts.
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The Bisto-to-Mr Kipling maker, which has debts of around GBP1.8bn (US$2.55bn), has faced weeks of speculation over its financial position.
Rumours of a possible private equity cash injection and asset sell-offs have been mooted and earlier this week Premier said it had completed the sale of a clutch of French businesses.
This morning, Premier announced plans to raise around GBP379m through a share offer. The company plans to issue over 1.55bn new shares at an issue price of GBP0.26 a share.
The company also said private equity firm Warburg Pincus had agreed to buy up to 246m shares in the business, equating to a 10% stake.
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By GlobalDataUnder the proposals, Premier has also struck a fresh agreement with its lenders, a deal dependent on the completion of the share offer.
Chief executive Robert Schofield said the plans would give the business the “appropriate capitals structure” and “provide a solid platform for Premier Foods’ future development”.
Schofield added: “We are completing the last stages of the successful transformation programme which we began following the acquisitions of Campbell’s and RHM. This leaves us well placed to focus on brand building, innovation and sales growth in order to drive long-term growth in profitability.”
Today, Premier also issued its annual results and booked a 13.%% rise in underlying pre-tax profits to GBP193.8m. Turnover was up 22.5% to GBP2.6bn.
