Premier Foods announces £1.1bn refinancing plan

PREMIER FOODS, the company behind Mr Kipling cakes, today unveiled a £353m rights issue as part of a massive capital refinancing plan aimed at reducing its considerably debt pile.

The heavily-indebted business, which is grappling with a £600m pension deficit, announced a £1.13bn financial restructuring plan, which includes a cash call, the issuance of new bonds and a new revolving credit facility.

Britain’s largest food manufacturer said it intends to raise total proceeds of £353m by placing 76.9m shares at 130p per share and to raise £100m, and raising a further £253 through a eight-for-five rights issue of 506.8 million shares.

It also intends to raise £475m by way of an issue of new bonds maturing in 2020/21, and through a £300m new revolving credit facility, maturing in 2019.

The capital plan will be used to accelerate the deleveraging of the group’s balance sheet; extend the maturity profile of the its financing arrangements and strengthen its capital structure, the company said.

Premier also announced today that operating profit for the year ended 31 December is £139.5m, compared with £159.1m in the previous year. Revenue fell to £856.2m from £1.07bn.