The UK's Premier Foods has launched itself into a £404 million rights issue, with one private equity firm buying a ten per cent stake.
Following last year's acquisition binge, which saw Premier Foods take over Campbells Soup, the company has now looked to shore up its cashflow by issuing 1.55 billion in new shares priced at 26p each.
While private equity group Warburg Pincus has already agreed to purchase 246 million shares, Premier Foods could potentially attract new capital through a secure virtual data room, which allows for the encrypted transfer of sensitive company accounts online.
Chief executive of Premier Foods, Robert Schofield, commented: "We … have proposed raising approximately £404 million gross equity processed, which we believe … will put in place a more appropriate capital structure for the business going forward and provide a solid platform for Premier's future development."
He added that the additional funds could leave the company "well positioned for further progress in 2009".
Premier Foods is not the only UK plc to launch a rights issue this week, with industrial real estate group Segro also announcing plans to raise £500 million in new capital.
