Premier Foods to sell meat free Quorn to reduce debt

Premier Foods is hoping to knock a ‘meaty’ chunk off its enormous £1.4bn debt mountain through the £230million sale of its vegetarian food brand Quorn as talks to complete the sale were said to be ‘advanced’.

But analysts fear the disposal of Quorn would not be enough to return Premier Foods to health. Although the firm has seen profits of £323m against sales of £2.6bn for 2009, its share price has more than halved in 2010 and CEO Robert Schofield will be hoping for some respite from the City following pressure for him cut the company’s debt, which was racked up by a shopping spree under his leadership.

Quorn, purchased for £172m from Marlow Foods in 2005 and is reportedly valued at between £200m and £250m. Premier Foods cites retail sales of £1.2bn alone, from just twelve of its top brands but although it is understood more than the Quorn brand may be sold as part of the debt reduction plan, which ones from the likes of Hovis, Kipling, Sharwoods, Bisto, Batchelors’, Branston or Hartley’s amongst other will be sold on.

Swiss giant Nestle is widely seen as a front runner to snap up the brands from the debt-laden food manufacturer.

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