Premier Foods secures key bank deal
Under the terms of the package, banking facilities of £1.2bn have been extended from December 2013 to June 2016. Covenants have also been re-set to reflect the group’s growth priorities of focusing investment behind eight Power Brands, reducing its costs and its disposals programme, according to the firm.
Premier said it had received “unanimous consent” from its banking syndicate and pensions schemes. It is now awaiting the signature of the final documents, expected at the end of the month.
Additional term loan
“The total interest rate swap portfolio, including previously restructured swaps, will be restructured into an additional term loan of approximately £200M,” a statement from the firm revealed.
“This will have the effect of reducing the group’s interest expense. Additionally, the Trustees of the group’s pension schemes have agreed to defer deficit contribution payments until 2014.”
Despite the new terms, Premier said it expected its overall financial results for last year to be “at the lower end of market expectations”. But it stressed that it remained focused on stabilising the business and investing in its recovery and future growth.
Intense speculation
The news comes after intense speculation that a re-financing deal for the firm was imminent. However, the firm remained silent on any potential agreement, following reports in The Sunday Times two weeks ago that a deal had already been secured.
Experts confirmed that they expected a new agreement to be reached ahead of the firm’s covenants test, which was due at the end of March after being from postponed from December last year.
The new deal will be welcome news for the firm as experts have repeatedly stressed that its long-term security rested on renewed backing from its lenders.
Speaking last month, Clive Black, an analyst at Shore Capital, told FoodManufacture: “Premier is still in a state of flux as we continue to wait for the results of the financing agreement. Once we see those, we will see a clearer picture of where the company is heading.”
