Liverpool food firm sells off part of its business for £12m to ease debts

Haydens Bakery products

Liverpool firm Real Good Food has sold off a part of its business for £12m.

The firm, which is in the processes of restructuring, has sold off Haydens Bakery which is based in Wiltshire to the Bakkavor Group.

The food products company has recently raised £1m through a share offer and agreed an “amendment deed” with shareholders to extend the final repayments on loans to the end of June 2020.

The sale of the bakery business will raise further funds. There will be a cash payment of £9.6m and the assumption by the buyer of £2.4m of third-party debt.

The funds will be used to reduce the group’s debt, first settling the lending secured against Haydens’ assets (£2.3m), then repaying in full the outstanding term loan with the group’s bankers (£1.3m).

The balance of £6m will be split between funding the group’s working capital requirements and the potential repayment of external shareholder debt.

Haydens makes premium tarts, pies and crumbles, Danish pastries, sweet buns, yum yums and doughnuts and sells principally to major retail customers, and operates a same day consolidation service for one of its major customers.

Haydens has been part of Real Good Food since the group’s launch in 2003.

Given the nature of Haydens’ to Bakkavor’s core business, the board believes that, in line with its turnaround plan and focus on its core assets, there is greater value for the group’s shareholders through this disposal to Bakkavor than through continued ownership.

Haydens – excluding the Chantilly Patisserie business which is not a part of this transaction – contributed £31.3m of revenue, and broke even at profit before tax, closing the year with net liabilities of £800,000.

In the past 18 months, there has been significant investment in Haydens and the group therefore expects to incur an accounting loss on disposal in the region of £500,000.

Real Good Food chief executive Hugh Cawley said: “This disposal marks an important next step in the restructuring and performance improvement of Real Good Food and is line with our turnaround plan for the Group.

“Given the sizeable areas of common interest, we believe that Haydens and its staff will prosper better in partnership with Bakkavor.”

Agust Gudmundsson, chief executive officer of Bakkavor, said: “We are pleased to welcome Haydens to the Bakkavor Group.

“It is a business which shares Bakkavor’s passion for providing outstanding service, quality and value to its customers and has a reputation for supplying some of the best tasting sweet treats to the UK’s leading retailers.

“This acquisition will grow both our capacity and product offering in the Desserts category, and we are delighted to be welcoming Haydens’ management and the wider team to our business.”

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