Bakkavor quiet on reports of share capital sale

10-Aug-2014 - Last updated on 23-Jul-2024 at 13:28 GMT

Bakkavor refused to comment on reports it had contacted bankers in a bid to sell up to nearly half of the firm’s share capital

Ready meal supplier Bakkavor has refused to confirm or deny media reports that it is planning to sell up to half the firm's share capital.

The fresh prepared foods manufacturer has contacted bankers in a bid to sell the share capital, according to Sky News. Bakkavor executives were said to be close to appointing Barclays bank to locate buyers for the quarter of the business owned by the Icelandic bank Arion Banki.

Financial crisis of 2008

The intentions of other Icelandic institutions which own part of Bakkavor empire remain unclear. The Pension Fund of Commerce and the Gildi Pension Fund jointly own about 12% of the company. Iceland's banks were very hard hit by the financial crisis of 2008.

But co-founders of the business the Gudmundsson brothers, Agust and Lydur, had no plans to sell their 39% shareholding, said the Sky News report.

Bakkavor made about £111M in pre tax profits last year and is due to post a six-month trading update later this week.

The manufacturer has sold a string of overseas businesses over the past 12 months, as part of its continuing restructuring operations.

Ceo Agust Gudmundsson

In May it sold 40% of its Italian pizza manufacturing business to Dreamfood for an undisclosed sum. At the time, ceo Agust Gudmundsson said the sale of a stake in Italpizza would allow it to focus on its key markets of the UK, North America and Asia.

In January, Bakkavor sold its South African prepared fruit business, Spring Valley Foods to In2food Group, also for an undisclosed sum. Previous sales have included its ready meals operation Heli Food Fresh in the Czech Republic.

Last year Bakkavor restructured its borrowings in a debt-for-equity swap.

Earlier this month Bakkavor appeared fifth on a list of Britain’s top private food and drink business, on the Top Track 100 compiled by The Sunday Times. Leading the list was Brakes with annual sales of more than £3bn and profits of £140M.

The manufacturer, which employs more than 16,000 people in the UK, supplies the nation’s biggest retailer Tesco, along with Marks & Spencer, Waitrose and others. Global customers include: Burger King, PizzaExpress, Pret a Manger and Starbucks.

Meanwhile, the Sky News report is available here.