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Premier Foods plc (PFD)

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Monday 14 December, 2020

Premier Foods plc

Notice of GM and Proposed Capital Reduction

RNS Number : 5177I
Premier Foods plc
14 December 2020
 

 

 

14 December 2020

 

Premier Foods plc ("Premier Foods" or the "Company")

 

POSTING OF CIRCULAR AND NOTICE OF GENERAL MEETING TO APPROVE A CAPITAL REDUCTION

 

Premier Foods announces that a shareholder circular (the "Circular") detailing a proposed reduction of capital of Premier Foods ("Proposed Capital Reduction") and a notice convening a general meeting of Premier Foods (the "General Meeting") to consider and approve the Proposed Capital Reduction will be posted to shareholders today.

 

Proposed Capital Reduction

Over the course of the last year Premier Foods has successfully completed its strategic turnaround programme. This has involved:

 

· the introduction of a new management team;

· the completion of its Strategic Review, with a landmark agreement with its pension schemes; and

· a consistent trading record and accelerated reduction in Net debt.

 

As a consequence of recent positive trading and improved cash flow, the Company has also been able to repay £120m of its Floating Rate Notes due July 2022. In addition, as reported at the Company's recent half year results for the 26 weeks ended 26 September 2020, Net debt has been reduced to £382.8m on a pre-IFRS 16 basis (£403.1m, post-IFRS 16), and Net debt/EBITDA reduced to 2.3x on a pre-IFRS 16 basis.

 

These actions have significantly improved the Company's financial position. The Company currently has a profit and loss account deficit which, as at 24 October 2020, amounted to £460.3m (on an unaudited pro forma basis). At the same date the Company's share premium account showed a positive balance of £1,409.8m (on an unaudited pro forma basis).

 

The share premium account is an undistributable reserve and, accordingly, the purposes for which the Company can use it are extremely restricted. The Company is therefore proposing a capital reduction in order to cancel the amount standing to the credit of the share premium account and to transfer it to the Company's profit and loss account. The realised profits thereby created would be applied to increase the accumulated profit on the Company's profit and loss account. This is intended to eliminate the profit and loss deficit and, in addition, to create additional distributable reserves for the Company. The Proposed Capital Reduction itself will not involve any distribution or repayment of capital or share premium by the Company and will not reduce the underlying net assets of the Company.

 

The Board believes that the Proposed Capital Reduction will provide greater flexibility in how the Company manages its capital resources going forward, such as the ability to pay dividends, should the Board determine it is appropriate to do so. However, the Company has not made any decision as to the use of any such realised profits, should the Proposed Capital Reduction take place.

 

Shareholders should note that the Proposed Capital Reduction is conditional upon the approval of Shareholders at the General Meeting and also the confirmation of the Court.

 

Expected timetable

 

Event

Expected time/date

Publication of the Circular

14 December 2020

Latest time and date for receipt of Forms of Proxy or CREST Proxy Instruction

11:00 am on 9 January 2021

Date of General Meeting

11:00 am on 11 January 2021

Expected date for final hearing and confirmation of the Proposed Capital Reduction by the Court

9 February 2021

Expected date that the Proposed Capital Reduction becomes effective

on or shortly after 10 February 2021


All dates and times are (unless otherwise stated) the relevant time and date in London, United Kingdom. The dates and times given are indicative only. The expected dates for the confirmation of the Proposed Capital Reduction by the Court and the Proposed Capital Reduction becoming effective are based on provisional dates that have been obtained for the required Court hearings of the Company's application. These provisional hearing dates are subject to change and dependent on the Court's timetable.

The timetable assumes that there is no adjournment of the General Meeting. If there is an adjournment, all subsequent dates are likely to be later than those shown.

Conduct of the General Meeting

The Circular contains a notice convening the General Meeting to be held at 11:00 am on Monday, 11 January 2021.

 

The notice of General Meeting reflects the intention of the Board with respect to the law in force, and relevant guidance, as at the latest practicable date before the publication of the notice of General Meeting. In light of the UK Government's current guidance on public gatherings and associated social distancing measures in response to the COVID-19 pandemic, the Board has concluded that the General Meeting will be a closed meeting and Shareholders cannot be permitted to attend the General Meeting in person.

Instead of attending the General Meeting, Shareholders are asked to exercise their votes by submitting their proxy electronically or by post as soon as possible, and these must be received by no later than 11:00am on Saturday, 9 January 2021. Shareholders who wish to appoint a proxy are strongly encouraged to appoint the Chairman of the General Meeting as their proxy. Please note that the appointment of a person other than the Chairman of the General Meeting as your proxy will not be valid, as that person will also not be permitted to attend the meeting in person in order to vote on your behalf.

Shareholders are invited to submit questions relating to the resolution being proposed at the General Meeting in advance of the meeting via email at [email protected] by no later than 11:00 am on Thursday, 7 January 2021. We will endeavour to answer questions received in advance, by publishing responses on thematic topics on our website prior to the General Meeting.

Shareholders are also invited to follow the General Meeting via telephone. Please email [email protected] if you would like to receive the dial in details. The lines will be open from 10:45 am on Monday, 11 January 2021. Please note that, whilst Shareholders will be able to listen to the conduct of the General Meeting, it will not be possible to ask questions live at the meeting.

We will continue to monitor the evolving impact of the pandemic and the UK Government's guidance and regulations and, if it becomes appropriate or necessary to make changes to the proposed format of the General Meeting, we will inform Shareholders as soon as we can via our website ( www.premierfoods.co.uk ). Shareholders should check our website to ensure they have the most up to date information available regarding the General Meeting.

 

Copies of the Circular (including the notice of General Meeting) are available to view or download from the Company's website, www.premierfoods.co.uk , and have been submitted to the Financial Conduct Authority's National Storage Mechanism (NSM), and will be available for inspection shortly at https://data.fca.org.uk/#/nsm/nationalstoragemechanism .  

 

 

For more information please contact:

 

Simon Rose, General Counsel & Company Secretary  +44 (0)1727 815850

Richard Godden, Director of Investor Relations & Treasury  +44 (0)1727 815850

Hannah Collyer, Corporate Affairs Director  +44 (0)1727 815850

 

Headland

Ed Young  +44 (0)7884 666830

Francesca Tuckett  +44 (0)7884 667661

 

 

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