Premier thrown a lifeline on refinancing

Premier Foods, the maker of Mr Kipling's cakes, has agreed a key refinancing deal that secures its future until at least June 2016.

Lenders to the group, including Lloyds Banking Group and Royal Bank of Scotland, handed Premier a lifeline yesterday when they agreed to extend the due date for £1.2bn of loans from December 2013 to June 2016.

Without the deal, Premier would have been unable to meet its 2013 repayment because its £1.2bn takeover of Hovis-maker RHM at the top of the market in 2007 has left it reeling under huge debts.

In addition to extending the life of the loan, Premier said "covenants have also been reset to reflect the group's growth priorities of focusing investment behind eight 'power brands', strengthening its capabilities, reducing costs and divesting selected businesses".

The "power brands" include Ambrosia, Oxo and Bisto.

The company said it would reveal further details about its trading performance and refinancing package when it announces its 2011 results towards the end of March.