Premier Foods gains lifeline with loan repayment deal

Premier Foods Premier Foods has struggled despite owning major brands including Mr Kipling

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The future of Hovis and Mr Kipling-owner Premier Foods is secured after it gained more time to repay £1bn of loans.

The company, the UK's largest food manufacturer, ran up large debts after buying up brands including Homepride and Fray Bentos.

Recently it said it would cut 600 jobs, about 5% of its 12,000-strong workforce, to trim costs.

Its banks have now extended its repayment deadline from 2013 to 2016.

The banks include the partly government-owned Lloyds and Royal Bank of Scotland.

The refinancing plan will be formally agreed by the end of the month.

The company plans to concentrate on what it calls its eight "power brands", which include Oxo and Bisto.

It is expected to sell off some other brands, including Sarsons vinegar and Hartley's jam.

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