Fri, 06 May 2011 | DIVISION SALE
Speculation is rising over plans for the future of Northern Foods, with some city analysts predicting that brands including Fox's Biscuits and Goodfella's could be sold off in a bid to pay down the company's debt.
The food company is being taken over by Ranjit Boparan in a deal worth £342 million. He has told employees of his ambitious plan to raise the turnover of Northern and the 2 Sisters Food Group to £3 billion by 2015.
There is mounting speculation, however, that pressure to reduce the company's debt levels could force the selling off of some of its most well-known brands, but finance experts are divided over what course of action Boparan may take.
Clive Black, an analyst with Shore Capital, said, "[Boparan] has taken his business right to the limit with what he can debt finance. We would expect him to sell most of the branded businesses over time to reduce debt."
Panamyre Gordon analyst, Damian McNeela, disagreed however, stating that he believed Boparan would stick to his plan to retain the branded businesses and use his experience in brand-building to capitalise on "significant scope to improve the brands, particularly Goodfella's."
A spokesman for Northern Foods spokesman would not comment on any plans to sell or retain the brands, but emphasised that Boparan recognised their importance.
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