Premier Foods nearing agreement with lenders over debt refinancing
HOVIS, Mr Kipling and Ambrosia group Premier Foods is thought to be on the brink of agreeing new bank loans that will secure its future.
Part-nationalised Royal Bank of Scotland and Lloyds are among the lenders expected to renew �1billion of loans and extend Premier’s repayment deadline for a further three years beyond the current deadline in 2013.
Heavily indebted Premier has been brought to the brink by debts incurred on an expansion spree that saw it buy RHM, the firm behind Hovis bread, for �1.2billion in 2007 having acquired Campbell’s UK and Irish business, adding Oxo, Batchelors, Homepride and Fray Bentos, the year before.
According to reports, the banks will ask that the proceeds of several disposals planned by Premier are used to fund some repayments before the new 2016 deadline.
Premier has already signalled the potential sale of some of its brands as it looks to focus on eight “power” brands, including Oxo and Bisto.
Hartley’s jam, which is made at Histon, near Cambridge, and Sarcen’s vinegar are thought to be among the brands on the sale block.
It is understood that the majority of Premier’s 28 lenders are supportive of the debt deal, although one or two have reservations which could prolong negotiations for another few weeks.
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Last month, Premier embarked on a major television advertising drive as part of more than �50million of marketing spend this year to promote its main brands, which also include Batchelors and Sharwood’s.
Also among the lines being promoted is the company’s range of Loyd Grossman sauces, which are among the products made at a Premier Foods factory in Bury St Edmunds.
The Bury site also produces Branston pickle and Haywards pickled onions.