The loan will comprise of a £210M term loan, a £200M revolving credit loan (maturing in June 2021) and a £75M term loan (maturing in June 2024), Bakkavor confirmed.
The ready meal manufacturer also planned to redeem all outstanding senior secured notes with the funds, it claimed.
Interest costs would be “significantly reduced” after it receives the loan, Bakkavor said. After the loan is completed, it would have no listed securities.
‘Significant improvements in financial strength’
Bakkavor chief financial officer Peter Gates said: “This new financing structure reflects the significant improvements in the financial strength of the business over recent years. We would like to thank our lenders for their support and commitment to the group.”
The multi-million pound loan deal came after Bakkavor’s corporate credit rating was upgraded in April last year. The manufacturer’s improved trading, earnings and cash flow meant its rating was upgraded from B to B+.
Ratings agency Standard & Poor also noted Bakkavor’s success in deleveraging, or reducing its borrowing.
At the time, a Bakkavor statement said: “Bakkavor believes the upgrade is recognition of the significant progress the group has made in recent years and the consequent improvements to the financial strength of the business.”
Meanwhile, Bakkavor has recruited about 720 workers over the past year to meet “increasing demand” for its products.
Bakkavor began recruiting for 310 new workers for factory production and management roles in Lincolnshire in November, after increased demand from customers.
In September, the firm began recruiting for 40 new full-time workers at its soups and sauces factory in Lincolnshire.
It recruited for 470 new jobs across its deli and desserts businesses in June, after growing popularity of its fresh choux buns and trifles, it said.
- Agreed corporate loan for £485M
- £210M term loan
- £200M revolving credit facility – maturing in June 2021
- £75M term loan – maturing in June 2024