Premier Foods, which makes Hovis bread, has revealed that it is in talks with possible investors regarding a cash injection.
The company, believed to have debts of £1.8bn, is talking with CCMP Capital about the cash injection, reports the Sunday Telegraph.
According to the paper, the company is following this route because it is difficult to finance existing debt during the current economic climate.
If its overall debt burden is reduced, the firm said, the City may re-rate its shares.
“Effectively the company is looking for a bridge that will remove the uncertainty about the debt and banking covenant issues,” a source told the paper.
But any deal with CCMP Capital could be rejected if investment comes in from another party.
The company recently said that it was going to revamp the iconic Fray Bentos pies.
