Bernard Matthews sale sparks pension row
the former owner of Bernard Matthews will receive millions from its administration while members of its pension scheme are set to get only 1p in the pound, research from a committee of MPs shows.
the details are set to spark a fresh row over pension rights and whether owners should receive huge sums from firms despite black holes in retirement funds.
the Bernard Matthews Pension Fund has been left with a gaping £17.5m deficit which is likely to swell to £20m, the report commissioned by MPs show.
the business, best known for producing turkey products, was placed in a special type of insolvency called a pre-pack administration which allows assets to be sold in advance of a firm going under, leaving creditors unpaid.
Poultry producer ranjit Boparan bought Bernard Matthews after private equity investor rutland Partners failed to turn it around.
Politicians on the Work and Pensions select Committee are probing the sale and the use of prepack administrations. the MPs asked Professor Prem sikka of the University of essex to examine the pre-pack administration arrangement and he claims rutland is likely to receive £39m.
the proceeds of the sale will also be used to make a full payment of £46.4m to lenders Wells Fargo Capital Finance (UK) and PNC Financial services UK.
MPs claim the pre-pack administration arrangement acts against the interests of pensioners who need better protection.
sikka said: ‘the administration strategy seems to have been carefully crafted to enable secured creditors and controllers of Bernard Matthews to extract maximum cash from the company and dump the pension scheme and other liabilities. No attention has been paid to the hardship caused to retired and existing employees’.
the scheme is now set to pass into the Pension Protection Fund – an industry-backed safety net for the pensions of insolvent companies. SKY could soon be the centre of a takeover bid if media mogul Rupert Murdoch takes advantage of the fall in the pound to buy the 61pc he doesn’t already own in the broadcaster.
Investors will be keeping a close eye on the television channel this week, which is due to post its results for the last three months on Thursday.
Takeover talk has surrounded Sky for some time prompted by the return of Murdoch’s son James as chairman at the beginning of 2016.
He was forced to resign four years earlier in the wake of the phone-hacking scandal, and his return sparked fresh speculation of a bid. He hinted there could be a move in the future saying last October a 39pc stake in Sky was ‘not an end state that is natural for us’.
Earlier this year analysts at broker Macquarie said the time was ripe for Fox – owned by Murdoch – to snap up the remaining shares.
Shares in Sky are down 18pc on this time last year, having fallen to 886.5p from 1080p.
If Fox was to buy the remainder of the shares at current market value, it would set Murdoch back £15.7bn.
Fox itself turned over £21.8bn last year.