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Regulator won't give Uniq clearance for pension framework

By Elaine Watson , 19-Jul-2010
Last updated on 20-Jul-2010 at 10:34 GMT

The pensions regulator has refused to clear Uniq's proposed plan to pay off its £400m+ pension scheme deficit.

The scheme, as currently constituted, did not meet all of the criteria for clearance, said the regulator.

Uniq said it would continue to work with the trustee to find a resolution, but anticipated that this could take “some time to resolve”.

It added: “The outcome of this process will have a fundamental impact, either positive or negative, on the pension scheme and on shareholder value.”

Investec Securities analyst Nicola Mallard told FoodManufacture.co.uk that she wasn't surprised that Uniq's scheme had failed to get the green light from regulators as the company itself had described it as "fairly innovative".

She added: "The regulator usually likes firms to pay off the deficit in 10 years, and what Uniq was proposing would have taken something like 40 years as the deficit is more than £400m."

In April, the chilled food firm warned that increasing the scale of its business was "essential" to rebalance its free cashflow "with the currently disproportionate scale of the pension fund liabilities". However, this strategy was "dependent on putting in place the pension agreement".

The Uniq pension scheme had a deficit of £436m as of March 2009.

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