Bakkavor chilled ready meals

Bakkavor has extending its banking facilities to pay down £140m of corporate debt.

The food group has increased its banking facilities from £80m to £220m and extended its maturity date from October 2016 to February 2018.

It will use the increase in liquidity to fund the early repayment of £140m of debt in 8.25% corporate bonds due in 2018.

The company said the actions would have “material reduction in interest rate margin” and “significant savings for the group”.

Chief financial officer Peter Gates commented: “This recognises the excellent progress made to the financial strength of this business over recent years and I would like to thank our lenders and investors for their ongoing support and commitment to the group.”

Last month the ready meal manufacturer said it outperformed the fresh prepared foods market in 2014, registering like-for-like revenue growth of 4% to £1.72bn again wider market growth of 1.5% last year.

Total sales also grew were up 3% in the 12 months to 27 December from £1.65bn in 2013 to £1.69bn, while adjusted EBITDA margin from 6.6% to 7.1% as Bakkavor continued to focus on productivity and costs.

Last year, reports suggested that Arion Banki was looking to sell its 25% stake in the business, hiring Barclays to lead the process. However, CEO Agust Gudmundsson and his brother Lydur are understood to remain determined to retain their 39% shareholding.