- On Tuesday, Britain's Premier Foods announced a 1.13 billion pound ($1.89 billion) refinancing plan as part of an ongoing restructuring designed to reduce its debts and keep the business viable.
Premier Foods said it would raise a total of 353 million pounds by a placing of new shares and a rights issue, and a further 475 million pounds through a bond issue. It also secured a new 300 million pound banking facility, cutting down its lending syndicate from 28 to 7, and set up a new pensions agreement.
- Premier Foods is continuing a strategy set last year when it closed three bakeries, two mills, and revamped its logistics network as part of a restructuring of its bread business that cost 29.1 million pounds. It also announced in January that was to sell a 51% stake in its bread business to U.S. private-equity firm Gores Group for a gain of 28 million pounds.
Premier Food intends to use its cash infusion to build up it grocery focus, as it scales down its bread production. As Premier Foods' CEO Gavin Darby said, “We are now focused on growing a high-quality branded grocery business.” However, it will continue its efforts in the cake business, having announced an investment of 20 million pounds in a new Snack Pack cake slice range in January.
According to Bloomberg, "Sales of so-called grocery power brands may be 'slightly negative' in the first quarter of 2014 because of the later timing of Easter, moderate consumer spending on groceries, and cooler weather." However, Premier Foods intends to stick to this strategy, as Darby asserts they are confident about the rest of the year.