Premier Says Lenders Agree to Defer Covenant Test Until March
Premier Foods Plc (PFD), owner of the Hovis bread and Bisto gravy brands, agreed with its lenders to postpone a financial covenant test until March.
The lenders deferred a test due on Dec. 31 to March 31, 2012, as part of Premier’s discussions on debt refinancing, the St. Albans, England-based company said in a Regulatory News Service statement today. Premier was in talks with banks to reset covenants beyond their current maturity of December 2013, Chief Executive Officer Michael Clarke said last month.
“In recent weeks, we have set out our priorities and made significant leadership changes to strengthen our focus,” Clarke said in the statement today. The company will provide an update on long-term debt refinancing and extension after completing talks with its lenders, he said. Clarke said in October he was “pretty optimistic” about discussions with the banks.
Premier’s shares plunged 42 percent to a record low last month after the company said it will miss analysts’ full-year estimates as third-quarter earnings were “significantly below management forecasts.” The company will focus on eight “power brands” that contribute to two-thirds of sales, including Hovis, Batchelor’s, Bisto and Mr. Kipling, and dispose of businesses that add little value, Clarke said then.
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