Bakkavör has had a shaky start to the financial year having failed to meet a £140m debt repayment.

In the week it unveiled its first quarter results, the ready meals giant admitted it had asked lenders to extend the maturity dates on its bonds, but that talks had progressed more slowly than expected.

"It's very unfortunate things are taking longer than expected and we've had to make this announcement," CFO Richard Howes said. "We've had a lot of support from lenders on extending the maturity of the bonds, but given Iceland's tricky economic situation, progress has been slower.

"I have a good level of confidence we will be able to extend the bonds; it's just a matter of it getting through the backlog Iceland is having to deal with. I've set a target to resolve the situation before our Q2 update in July."

Bakkavör continued to make a loss in the first quarter of 2009, but lost less than in the same period last year. Like-for-like sales grew 1%, while operating profits fell 29% to £18.7m. The total loss for the period was £8.1m versus £12.8m last year.

Howes said the impact of its cost-cutting measures would start to show in the second quarter. Operating profits were expected to improve by 15% to £125m for the full year.

However, doubts remain over the company's ownership, as largest shareholder Exista - which is owned by Bakkavör chair Lydur Gudmundsson and CEO Agust Gudmundsson - has yet to publish its results.

Bakkavör's sale to another Gudmundsson-owned company, ELL 182, announced in October, has not yet cleared, although Howes insisted the matter was not affecting operations.

Bakkavör is also restructuring its senior management team, splitting the business in two. Gordon Pates will lead the UK arm and Brian Walton will run the Europe and traded produce unit. MD Chris Thomas is leaving to join Adelie Foods as CEO.