Shares in the owner of Hovis bread and Mr Kipling cakes slid following speculation it would ask shareholders for a £300 million New Year funding boost.
Premier Foods has confirmed it was considering a fundraising rights issue as part of a revamp the company is hoping will address debts of approaching £1 billion and see off the attentions of Wall Street vulture fund Apollo.
The company is also understood to be mulling over a further pension payment holiday the firm’s fund has a £395m deficit and a substantial bond issue in an effort to turnaround the firm’s performance.
Premier recently confirmed it was in talks to bring in an outside investor to revive its Hovis bread division. It has also sold a number of businesses in the last year including its Sarson’s vinegar and Haywards pickles brands.
In a statement to the markets on Monday, Premier said: “The group’s bank debt and revolving credit facilities are in place until mid-2016.
“As previously stated in the group’s half-year results in July, the board continues to review the full range of options available to the group regarding its future capital structure.
“The group confirmsthat this review is ongoing and, while it includes the possibility of a rights issue, no decisions have been made at this stage.”
Shares closed down 5.00 at 125.50 on Monday.