Former Bernard Matthews owners blame customers for deal which saw pensioners lose out
PUBLISHED: 13:55 19 April 2017 | UPDATED: 17:00 19 April 2017
Archant Norfolk 2017
The former owners of Bernard Matthews have hit back at suggestions they profited at the expense of pensioners, claiming that reluctant customers scuppered a better deal to save the turkey producer.
It is the first time Rutland Partners, the firm’s owners between 2013 and 2016, have spoken out about the deal which saw the failing company bought out of administration in a pre-pack deal by 2 Sisters food entrepreneur Ranjit Singh Boparan for £87.5m.
The private equity firm has come in for criticism over its structuring of the deal, which saw the company’s defined-benefit pension scheme pass into the Pension Protection Fund.
The Boparan Private Office has previously said an offer to take on pension liabilities was turned down, while MPs last week accused Rutland of “lining their own pockets” in choosing a deal which saw their investment take priority over payments to pensioners.
MORE: Bernard Matthews workers ‘feel betrayed’ as job losses confirmed at Norfolk site
In a lengthy statement, Rutland Partners said Bernard Matthews was offered to more than 40 parties in the summer of 2016, resulting in two offers being put on the table in July - neither of which was deemed a “solvent solution” by the company’s advisers and stakeholders.
“In light of the failed sale process, Bernard Matthews and Rutland and its advisers focused fully on the restructuring solution, which had support from Rutland and the Bernard Matthews banks,” it said.
“These plans were taken to its major customers to reassure them and gain their support. There were positive responses from a number of key customers, but some of material importance to the business indicated that they would not support the proposed restructuring and were intending to switch suppliers irrespective of any restructuring.
“This lack of customer support made it impossible to pursue a restructuring of Bernard Matthews and left it without a ‘solvent’ solution to the financial crisis it faced.”
When Boparan Private Office returned with a revised offer in the light of imminent insolvency, the offer was assessed against other options by Deloitte, subsequently appointed as administrators.
“This offer was accepted by the Bernard Matthews Board given the lack of any other deliverable options and the apparent security it provided to the 2,000 jobs at risk. The Boparan revised offer did not however extend to taking on the pension deficit,” said Rutland.
‘Lining their own pockets’
MPs on the influential Work and Pensions Committee last week accused Rutland of passing up on the offer which would have protected the pension scheme in favour of one which ensured a better return on their investment.
Chairman Frank Field said: “I have confidence that the PPF, working with the scheme trustees, will act in the best interests of the pensioners, but it’s clear that the former owners passed up a better deal for pension scheme members in favour of lining their own pockets.”
The sale to BPO included a payment of £46.4m to lenders Wells Fargo Capital Finance (UK) and PNC Financial Services UK Ltd, and up to £39m to Rutland Partners, as part of the pre-pack model arranged by administrators Deloitte last autumn. The 700-strong pension scheme has been left with a total deficit of £75m.
The former owners’ statement concluded: “Rutland Partners very much regret that despite our substantial involvement and investment we were not able to return Bernard Matthews to a sustainable profit making business, but are absolutely clear that at all times we acted with the utmost professionalism and integrity in the conduct of our investment.”