Premier Foods has announced a £1.13bn refinancing plan aimed at reducing its heavy debts and reviving the business.

The maker of Mr Kipling cakes said it would raise a total of £353m via new shares and a rights issue. It also proposed to raise £475m through a bond issue and said it had secured a new £300m banking facility.

As part of its turnaround plan, Premier hived off a 51% stake in Hovis to American investors The Gores Group in January.

Chief executive Gavin Darby, who took the helm 12 months ago, described the new capital structure as “transformational” for the business, which nearly sank under the weight of its debts during the recession.

He said: “This new capital structure will liberate Premier Foods from its past and provides a great platform on which to execute our category based strategy.”

The group also published its 2013 financial results today. It posted a 12.3% fall in 2013 trading profit to £139.5m. Sales declined 20.1% to £856.2m. Its adjusted net debt at 31 Dec was £513.1m, a reduction of £120m over the year.

Darby said the focus now would be on growing a high quality branded grocery business, with strong underlying cash flows. “While consumer spending trends are currently subdued, we are confident in our expectations for 2014," he added.