A struggling sausage, burger and pastry manufacturer which blamed falling sales on celebrity chef Jamie Oliver's campaign for healthier school dinners warned its future was under threat yesterday.
Canterbury Foods was forced to put many of its businesses up for sale after it plunged into the red but said the offers it had received would not wipe out its debts of £20 million.
Canterbury said its best chance of survival was to hold on to as few as one of its businesses and secure a new deal with the bank over its debts.
But the company warned that if such a deal could not be agreed "there is almost no prospect of the group continuing to trade in its current form" and that shareholders would lose their investment.
Canterbury sells meat and pastry to wholesalers who then supply schools. Its other customers include pub brands, sandwich makers and in-store restaurants.
The group employs about 600 people at sites in Bridgend in South Wales, Hull, Sheppey and Whitstable, both in Kent, Stoke-on-Trent, and Bristol. Its plant at Hackney, east London, closed earlier this year.
Sales of meat products such as burgers and sausages dropped by £2.7 million in the first six months of the year because of the revolution in school dinners - giving it pretax losses of £11.5 million.
In the same September update, the company said its debts had reached £19.1 million.
It followed a high-profile campaign by Oliver to improve food for school children which was seized upon by the Government in the runup to the election.
Canterbury was also hit by higher costs and the Sudan 1 food scare earlier this year which led to six of its products being withdrawn.
It now hopes to announce the first disposal of one of its businesses "shortly" despite the low value of the offers made.
In a statement to the stock exchange, Canterbury said: "The company is currently in discussions with third parties which may lead to the sale of one or more of its businesses.
"Whilst these discussions have led to offers being made, the aggregate value of these offers is materially below the current indebtedness of the company.
"The marketing of these businesses has been extensive so the directors do not consider it likely that significantly higher offers will be received.
"Consequently, if all the company's businesses were sold and the company's debts discharged there is almost no prospect of a surplus for shareholders."
Canterbury added that the "best prospects for the company" were to retain "one or more" businesses and restructure the remaining bank debt.
The company said: "The bank has indicated that it will consider a proposal to restructure the bank debt following completion of the first disposal. However, there is no certainty that a restructuring can be agreed.
"In the event that terms for the restructuring of the bank debt cannot be agreed, there is almost no prospect of the group continuing to trade in its current form or that there will be any residual value for shareholders."