The poultry tycoon known as the Chicken King is set for a clash with his lenders and pension trustees over the use of proceeds from a £200m sale of the Goodfella’s pizza brand.
Ranjit Boparan, whose 2 Sisters food processing business supplies a range of supermarkets is believed to be struggling to pay its debts after an buying spree which has left his empire financially stretched.
In the past few years, 2 Sisters has also been squeezed by the big grocers’ price-cutting and subjected to a Food Standards Agency inspection after an undercover newspaper investigation found evidence of unhygienic practices.
Boparan Holdings, 2 Sisters’ parent company, agreed to sell Goodfella’s to Nomad Foods, the owner of Birds Eye and Findus, in January.
Following the sale, Boparan Holdings told its lenders it wanted to use £125m to repay half of a £250m tranche of bonds due for refinancing next year. The plan has angered holders of almost £600m worth of bonds that are due for repayment in 2021.
Boparan Holdings’ pension trustees are also understood to be concerned by the use of some of the Goodfella’s proceeds to reduce debt. The company’s defined-benefit pension funds had a deficit of £328.2m last year. Boparan Holdings made deficit payments of £19.4m.
The dispute with the bondholders and trustees hints at the financial strain on 2 Sisters. Boparan set up the business in 1993 as a supplier of own-label chicken to Tesco. It grew as Tesco expanded and in 2000 it made its first aggressive move with the purchase of the chicken processing operations of Hillsdown, a quoted company. Many more deals followed.
