Fresh prepared produce specialist Bakkavör is currently in discussion with Kaupthing in a bid to free-up some £150m (€171.2m) that it has trapped in the collapsed Icelandic bank.
According to a report in the Financial Times, industry sources said that the trapped deposit puts the group at risk of breaching some technical conditions in its debt covenants with its banking syndicate. Iceland's current foreign currency shortage is preventing the transfer of the sterling deposit to the UK.
Bakkavör, which supplies leading food retailers in the UK such as Tesco and Marks and Spencer, is working with long-term advisors Rothschild to negotiate over the issue with its 17 banks, the UK daily said.
The group recently announced that year-on-year operating profit fell 39 per cent to £18.2m(€22.9m) during the third quarter of 2008, contributing to a 37 percent drop (to £54.7m, or €68.9m) for the first nine months of the year.
Additionally, it ended its 10.9 per cent economic interest in Greencore Group PLC,citing difficult global economic conditions as the reason for thepullout.
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