Martin Clark, the finance director, said the money would be used to give Northern's debt a better, longer-term profile. He said he still regarded the convertible bonds as debt, not equity.
It is expected that Northern's borrowings will be about pounds 240m in March, its next financial year- end. Debt has been high since the acquisition of Express Dairy and Eden Vale from Grand Metropolitan in November 1991.
Mr Clark said: 'The money- raising exercise is to improve the profile of the balance sheet, not to try and build a war chest for acquisitions.'
The bonds, which have a 6.75 per cent semi-annual coupon, have 15 years until maturity. Yesterday Northern shares dropped 8p to 272p. The conversion price is 326p, a 20 per cent premium to the share price.Reuse content