Packing giant Linpac admitted it was renegotiating its debt arrangements amid takeover rumours while Central Bottling International tabled proposals to cut its workforce by almost a third. However, both firms remained confident about their long-term viability.
Linpac has confirmed it is involved in talks with its lenders to adjust its financial arrangements as the effects of the economic downturn make themselves felt.
However, Linpac did not comment on reports that a consortium of lenders was planning to oust the firm’s private equity owners, Montagu, and assume control of the firm.
“Overall Linpac continues to trade ahead of expectations and is maintaining its strong market position, despite the effects of the recession,” a company spokesman said in an emailed statement to FoodProductionDaily.com.
“However, like many others, the company has been affected by the decline in sterling, increased raw materials costs and some softening of consumer demand for our products.”
Linpac, which posts annual revenues approaching EUR 1.3 billion, was reacting to media reports in the UK that Deutsche Bank was leading the move after Montagu tabled proposals to restructure the firm’s GBP 600 million debt.
The Linpac spokesman said: “The company's lenders remain very supportive, and discussions have been initiated with them in order to adjust financing arrangements in light of the global economic downturn. These discussions are progressing well, and are expected to conclude by the end of the summer. “Such discussions are not affecting the day-to-day operations of the business, which continues to trade profitably.”
Redundancies and restructuring
Central Bottling International said that it had entered in consultation talks with staff over proposals to reduce its workforce by a third. The Doncaster-based firm, which exports processing and packing equipment for the food, beverage and industries, plans to cut 45 jobs from a total of 131.
The company has said the worldwide recession had dampened demand for its products both in the UK and abroad.
Company spokesman Richard Cranston told FoodProductionDaily.com: “Our core markets are beverage and brewing. Some of our biggest customers have stopped all their capital expenditure and we are a business focusing on project and capital equipment.”
Mr Cranston said the company aimed to use the situation to reorganize and strengthen its business, while adding that the company was expected reduced revenue streams for “the foreseeable future”.
“We are taking the opportunity to look at the business to forward plan” he said.
“This is not just an avenue to cut costs but to look at our business to restructure.Our parent company has expressed strong and full support in us.With the financial and technological backing of FleetwoodGoldcoWyard, part of the Barry-Wehmiller Companies of the United States, CBI is embarking on this new chapter certain of its success and long term viability.”