Clarke shares frozen in struggle to avert company meltdown

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CLARKE FOODS, the young and ambitious company that makes Lyons Maid ice lollies, appeared perilously close to falling off the stick yesterday.

Shares in the maker of Mivis and Zooms, which had rocketed as high as 163p in May, were suspended at a down-to-earth 8p.

Clarke is understood to be engaged in last-ditch talks on a restructuring plan with its bankers, National Westminster, to stave off collapse.

The chairman and biggest shareholder, Henry D Clarke Jnr, normally a publicity-hungry American who appears in his own ice-cream advertisements, declined to amplify a short statement issued through the Stock Exchange. The shares were suspended 'pending clarification of the company's financial position' - a standard phrase that often precedes restructuring or collapse.

Staff at the company's headquarters in Greenford, Middlesex, were under instructions not to talk to the press. One said a rescue plan was afoot and insisted: 'We're certainly not bust.'

It is thought the Clarke family is being asked to inject fresh capital into the accident-prone business. Clarke, which is advised by Panmure Gordon and Guinness Mahon, is seeking loans of pounds 20m from NatWest.

Last month it cancelled the planned interim dividend, blaming delays in the installation of ice-cream machinery in the early summer and poor weather since July. Sales were just 25 per cent of plan, leading to a huge build-up of stocks at exactly the wrong time - with winter coming.

It has also had trouble persuading the supermarket groups to stock its Clarke brand, a premium ice-cream that competes with the popular Haagen-Dazs.

Last year the Clarke family took control of a sleepy investment company, Yelverton Investments, changed its name to Clarke Foods, and embarked on a buying spree, transforming the company into the second-biggest ice-cream maker in the country.

Hillsdown Holdings, which sold Clarke three ice-cream factories last year, owns 15.4 per cent of the Clarke shares and all the preference shares. Allied-Lyons, which sold Lyons Maid to Clarke for pounds 14m, is owed pounds 3.5m-pounds 4m, due in August 1994.

(Photograph and graph omitted)

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