Premier Foods denies plans to sell brands
LONDON - Premier Foods has denied it is considering selling any of its key brands as it battles to reduce the massive debt it has built up by acquiring top names such as Hovis.
Premier was this morning reported by The Financial Times, which cited a source close to the company, to be close to selling brands including Mr Kipling cakes, Branston Pickle, Quorn and its range of Sharwoods sauces.
Premier said the FT was wrong to say it was considering the sale of any brands. A spokesman said: "[Premier] generates a lot of cash therefore it doesn't need to sell any brands to reduce its debt."
The company has built up net debt of £1.8bn through the acquisitions of Hovis maker RHM in 2007, and the Campbell Soup Company in 2006.
Its share price has fallen by 86% over the past year, taking a big dive last week amid fears it would soon break its debt covenants.
The fall in the share price makes it difficult for the company to raise equity to repair its balance sheet, making disposals the more likely option. The FT claims Premier wants to raise between £200m and £300m by either route.
The company spends an estimated £26m on advertising and has split its accounts between two creative agencies.
Miles Calcraft Briginshaw Duffy, which recently created much-lauded TV ads for Hovis, also works on Lloyd Grossman sauces, Ambrosia deserts and Batchelors sauces and noodles.
McCann Erickson works on Sharwoods, Bisto, Mr Kipling and Quorn.
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