Shares in Premier Foods, the UK’s largest food maker, tumbled today (8 February) amid anxiety that the business is suffering financial problems.
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The Hovis bread-to-Branston pickle maker has seen rising costs weigh on the business and last month the company warned that pressure would continue this year.
There has been speculation that Premier Foods would have to issue more shares to pay off debts. However, the company said it had no such plans.
“Premier is not contemplating a rights issue,” it said in a short statement to the London Stock Exchange. “Based on our expected financial results for 2007, we are not in breach of our financial covenants as at December 2007 and, based on our latest financial projections, we do not expect to be in breach on an ongoing basis.”
Shares in Premier Foods stood at GBP110 a share at 16:27 GMT, a fall of over 8.3% on the day.
