Iceland founder Malcolm Walker has said he has no plans to sell the business despite frequent approaches from hedge funds seeking to acquire it.
Opportunistic investors are reported to have bought the supermarket’s debt for as little as 67p in the pound earlier this year, in a strategy that can prelude a debt-for-equity swap and takeover if borrowing becomes unaffordable.
Iceland has about £750m of debts, and trade credit insurers Allianz and Atradius have cut their exposure to the supermarket.
Walker was responding to claims first reported by the Sunday Telegraph that he had begun “quietly marketing” Iceland.
“In the current climate, customers have never needed affordable quality frozen food more,” said Walker and Iceland co-owner Tarsem Dhaliwal.
“Iceland Foods is 52 years old this week and is a privately owned multi-generational family business. Our sons, Richard Walker and Paul Dhaliwal, hold executive positions and will take over from us in the future. We have no plans to sell the business, despite frequent approaches.
“Our 2025 bonds are trading in the mid-80s, which is positive given the current economic climate. The maturity is over two years away, we are paying a very low fixed interest rate, and when the time comes, we are supremely confident of our refinancing plans.
“Only a very small proportion of our suppliers have credit insurance. Credit insurers regularly review cover upwards and downwards for all retailers in the UK; therefore this is ’business as usual’ for us. We have a collaborative and effective working relationship with all of our suppliers, and they have reported no issues to us to date.”
Walker founded Iceland in 1970. He and Dhaliwal took full ownership of the frozen food chain in 2020, buying investment firm Brait’s 63% shareholding for £115m.
Iceland’s debt rating was downgraded by Moody’s in August as accounts showed the supermarket fell to a pre-tax loss of £4.1m in the 12 months to 25 March, from a profit of £73.1m the previous year.
Meanwhile, Wilko is reported to be in emergency talks with lenders to secure a £30m loan after failing to agree an extension to its revolving credit facility. The business recently offloaded its distribution centre in Worksop, Nottinghamshire, to DHL for £48m in a sale and leaseback deal.
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