From the Sunday Times (8 July 2018):
The poultry tycoon known as the Chicken King is braced for a clash with his lenders and pension trustees over the use of proceeds from a £200m sale of the Goodfella’s pizza brand.
Ranjit Boparan, whose 2 Sisters food processing business supplies supermarkets ranging from Marks & Spencer and Tesco to Aldi and Lidl, is struggling to pay down debt after an acquisition spree that has left his empire financially stretched. In the past few years, 2 Sisters has also been squeezed by the big grocers’ price-cutting and subjected to a Food Standards Agency inspection after an undercover newspaper investigation found evidence of unhygienic practices.
Boparan Holdings, 2 Sisters’ parent company, agreed to sell Goodfella’s to Nomad Foods, the owner of Birds Eye and Findus, in January. Following the sale, Boparan Holdings told its lenders it wanted to use £125m to repay half of a £250m tranche of bonds due for refinancing next year. The plan has angered holders of almost £600m worth of bonds that are due for repayment in 2021. Some of them believe Boparan has unfairly prioritised the holders of the earlier bonds because he is under financial pressure.
A source close to the situation said the 2021 bondholders were “jumping up and down” and considering legal action. Some are understood to have contacted Citibank, the bonds’ trustee, to demand an explanation.
Boparan Holdings’ pension trustees are also understood to be concerned by the use of some of the Goodfella’s proceeds to reduce debt. The company’s defined-benefit pension funds had a deficit of £328.2m last year. Boparan Holdings made deficit payments of £19.4m.
Implications for Stoke Ferry:
- The company’s huge pension deficit is a serious issue for Mill employees past and present
- Although the Mill is now operating under another company name ‘Amber Holdings’, this is owned by Boparan and his wife, is still part of the Boparan conglomerate and is as ‘at risk’ as the rest of the business
- Boparan’s reliance on bonds to support his ailing business will probably mean more asset sales in the future