Threat to jobs as Northern Foods to close its city headquarters

The group yesterday said 26 staff at its Thorpe Park office will be affected as Northern consolidates back office functions at its shared service centre in Wakefield.

Up to nine of these staff, working in the group’s legal department, have been told they may be made redundant as Mr Boparan begins integrating Northern with his 2 Sisters Food Group.

Shares in the food manufacturer were de-listed yesterday as the West Midlands-based poultry magnate completed his £342m takeover.

He bought Northern by paying 73p per share for the maker of Fox’s biscuits and Goodfella’s pizza. A Northern spokesman said: “With the acquisition now complete, Northern Foods and 2 Sisters have looked at the most appropriate location for the central functions and are proposing to relocate the finance and communications teams to Wakefield, to sit alongside other central functions such as IT, human resources and health and safety – bringing all of the teams together.

“A proposal has also been made to relocate the legal and company secretarial functions to Birmingham and regrettably this places a small number of employees at risk of redundancy.

“Whilst the announcement regrettably brings uncertainty for some, it is a necessary part of integrating Northern Foods and 2 Sisters to ensure we make the most effective use of the office locations we have.”

It is understood the company will try to negotiate an early exit from its Thorpe Park lease, which runs until 2015.

Northern moved to Leeds from Hull in 2005.

Mr Boparan, who beat Irish food group Greencore to win Northern, is under huge pressure to cut costs after financing the deal with debt.

Merging Northern Foods and 2 Sisters will create a debt-laden group with about 15,000 staff and more than 40 manufacturing sites.

Mr Boparan is funding the acquisition with a £695m senior note issue which he will use to repay a short-term loan from Goldman Sachs as well as clear Northern’s historic debt.

Northern currently pays annual interest of about £15m on its debt. However, Mr Boparan’s bond issue will pay interest of almost 10 per cent annually, meaning the merged group’s debt payments are expected to rocket to about £70m.

He must also inject £15m a year into Northern’s pension scheme.

Analysts believe in time Mr Boparan will sell Northern’s brands, such as Goodfella’s and Matthew Walker puddings, to pay down debt.

He has pledged to create a £3bn company by 2015, adding almost £1bn of new sales.