Northern Foods gets new sponsor and £300m after TPR intervention
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The Pensions Regulator has published an intervention report into Northern Foods Pension Scheme and its ultimate sponsor Boparan Holdings, after Boparan sold multiple subsidiaries and sought to refinance large amounts of debt it had issued.
TPR engaged with Boparan and said the remedy to secure the pensions of 13,000 members are:
TPR engaged with Boparan and said the remedy to secure the pensions of 13,000 members are:
- 2 Sisters Food Group – Boparan Holdings' main subsidiary – has replaced NFL as the scheme’s statutory employer;
- around £300m in contributions will be paid by June 2034, aiming to get the scheme to full funding on a ‘low dependency’ funding basis;
- Boparan Holdings’ guarantee has been extended to cover all ongoing liabilities to the Northern Foods scheme, including the scheme’s full section 75 debt of £372.1m;
- all material subsidiaries have also provided guarantees;
- the scheme will receive 100% of disposal proceeds from one remaining NFL business and 30% from the other, if sold; and
- Boparan Private Office has provided a “significant” unsecured guarantee for contributions due from Boparan Holdings and the statutory employer, but the guarantee ranks behind the group’s debt.
TPR said it believes the funding plan now in place “offers a realistic path to self-sufficiency, with enhanced direct support and material contingent support available if needed”.
The regulator opened an anti-avoidance case following the sale of businesses which started in 2018.
“Along with the scheme’s trustee, we had become increasingly concerned about the material reduction in the strength of the scheme’s direct covenant,” TPR said, adding that a guarantee that was put in place was inadequate.
TPR’s executive director of regulatory compliance, Gaucho Rasmussen, said: “Where corporate transactions take place and the pension scheme is impacted, it’s vital that the pension scheme is treated equitably compared with other stakeholders. We can and will use our enforcement powers to support a fair outcome for pension scheme members. This includes pursuing financial support from companies associated with the employers, including those outside the employer group.”
According to TPR, Boparan sold Goodfella’s Pizza in 2018, Manton Wood, Green Isle Brands and Matthew Walker in 2019, without the scheme receiving any share of the combined £400m, while getting 30% of the £255m for which Fox’s Biscuits was sold to Ferrero in 2020. Most of the sale proceeds from Fox’s were used to refinance debt, along with £475m of new bonds issued by Boparan, the regulator notes in the report.
In July 2024, TPR issued a warning notice under section 43 of the Pensions Act 2004, seeking formal financial support from Boparan Holdings and Boparan Private Office, along with several subsidiary companies of both entities.
The scheme is chaired by Chris Martin from Independent Governance Group.
