Shares in UK convenience food group Uniq tumbled this morning (19 July) after the company’s proposals to pay off its pension deficit was rejected by the country’s pensions regulator.
Uniq, which supplies UK retailers including Marks and Spencer and The Co-operative Group, said its “pensions framework” had not met “all of [the regulator’s] criteria for clearance”.
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Uniq was formerly UK dairy company Unigate and it has around 21,000 former milkmen in its pension scheme. In April, the company announced new plans to pay off its pensions deficit, which then stood at GBP436m.
Chief executive Geoff Eaton told just-food that, under the proposals, Uniq could push ahead with plans to expand the business.
“That agreement means we don’t have to make any payments to the pension fund for the next three years while we deliver our plan. From then on, the contributions will be linked to earnings, which significantly changes the financial risk to the company and gives the pension funds a share in our success,” Eaton said.
“The framework also enables us to raise new capital so that we can make new acquisitions so we can rescale our business to cope with the pension fund.”
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By GlobalDataToday, Uniq said it would resume talks with the trustees of the company’s pension scheme.
“The company and the Trustee continue to work together to seek a resolution for the Pension Scheme and the company anticipates it will take some time to resolve,” Uniq said.
“As previously stated the outcome of this process will have a fundamental impact, either positive or negative, on the Pension Scheme and on shareholder value.”
Shares in Uniq were down 29% at 11p at 09:15 BST this morning.
