Food manufacturer Bakkavör has agreed an extension and increase to its existing banking facilities, as well as a material reduction in the interest rate margin. 

The facilities have been increased from £80m to £120m and the maturity has been extended from October 2016 to February 2018.

Bakkavör is using the increase in liquidity to fund the early repayment of £140m of debt in 8.25% corporate bonds due in 2018. This will result in “significant interest savings” for the group.

Peter Gates, chief financial officer, said: “This recognises the excellent progress made to the financial strength of this business over recent years and I would like to thank our lenders and investors for their ongoing support and commitment to the group.”

In February, Bakkavör announced that full-year like-for-like revenues increased 4% to £1.72bn for 2014 for the 52 weeks ending 4 January 2015.

It claims to be the number one producer by value in 13 of the 16 categories of chilled food it supplies. Products include ready meals, pizzas, salads, desserts, soups and sauces. Customers include Tesco, Marks & Spencer, Sainsbury’s, Waitrose, Asda and Morrisons, which sell Bakkavör’s products to consumers under their respective retailer brands.