Vestey debt revamp in doubt

A DEBT restructuring of the Vestey family's business interests appears to be running into opposition, raising fears that to appease their banks the Vesteys will be forced to sell more assets than they would like.

Vestey, whose meat interests include the Dewhurst chain of butchers, has a new management team headed by Sir John Collins, former Shell UK chairman, and Robert Cooper, a former Robert Fleming financier.

They appointed new merchant bankers in December to advise on how to escape an expensive standstill arrangement with the banks for Union International, the Vestey subsidiary that went to the brink of receivership more than two years ago.

Vestey's new advisers, S G Warburg, have been trying since new year to raise fresh longer-term debt in the Vestey's top company, Western United. That would be used to repay Union International's pounds 100m debts.

Under existing arrangements, Union's debts are scheduled to be repaid in full by the end of this year.

This would require further disposals from the company in addition to the proposed flotation of parts of its Asian operations on the Australian stock market.

According to banking sources, however, the refinancing proposals are in danger of failing.

One source said that the banks appeared to be unwilling 'to increase their longer-term exposure to the Vestey group'.