Food Tycoon Singh Banks On £750m Debt Deal
One of Britain's most prominent food manufacturers is calling in bankers to help restructure the business empire behind Goodfellas pizzas and Fox's Biscuits.
Sky News understands that 2 Sisters Food Group has asked approximately half a dozen lenders, including Barclays, Goldman Sachs, HSBC and JP Morgan to present ideas for overhauling the company's balance sheet.
The move is aimed at putting 2 Sisters on a longer term financial footing three years after it bought Northern Foods, the then-owner of Fox's and supplier of ready-meals to many of Britain's biggest retailers.
Sources said the company wanted to secure longer-term debt to replace roughly £700m of debt taken on to fund the Northern Foods takeover, which matures in 2018.
Ranjit Singh, 2 Sisters' chief executive, has earned the nickname 'the chicken king' because of the market share he has accumulated in supplying meat and poultry to supermarkets across the UK and Europe.
Boparan Holdings, the holding company for 2 Sisters, said last December that losses after interest and tax had more than doubled during the 13 weeks to October 26, 2013, from £5.1m to £12.1m.
The increased loss came despite a rise in sales, and reflected the costs associated with restructuring the business.
Mr Singh said the numbers represented "a solid start" to its financial year, calling market conditions "challenging and competitive...as inflation continues to squeeze consumers' spend".
From a standing start two decades ago, 2 Sisters has been built into a food empire boasting £3bn in annual sales.
In addition to well-known brands like Goodfellas and Fox's, it is a big supplier of own-label products, and in 2010 bought the fish and chip shops chain, Harry Ramsden's.
Last week, Sky News reported that 2 Sisters is also in discussions with Burton's Biscuits about a merger with Fox's.
A deal would bring together products such as Wagon Wheels and Jammie Dodgers, which are owned by Burton's, and the large portfolio branded using the Fox's name.
Securing a deal could appeal to the management of 2Sisters, the parent company of Fox's, which is seeking ways to reduce its significant debt burden, including through potential asset sales.
The value attributed to Fox's, which was formerly part of Northern Foods, is unclear.
A spokesman for 2 Sisters declined to comment.