Palmer & Harvey (P&H) has followed up its extended distribution deal with Tesco with the successful conclusion of refinancing talks with existing lenders Japan Tobacco International (JTI) and Imperial.

Speculation had been rife the tobacco giants were in talks with the wholesaler about a rescue deal composed of an investment-for-equity arrangement.

P&H, the UK’s fifth-largest private company, announced late last night [April 4] that it had successfully completed its debt refinancing, including credit facilities with JTI and Imperial.

It is understood the agreement involves debt financing rather than equity financing. The small-drop specialist said the arrangement did not change its commercial relationship with the two tobacco businesses and it looked forward to continuing to work with all of its suppliers and retail customers “to deliver high levels of service” and making the best of its “scale and know-how” and further developing its relationships.

Tony Reed, P&H chief executive, said: “The refinancing provides us with a strong financial position from which to drive forward Palmer & Harvey and to take advantage of the many opportunities we see in the wholesale and convenience markets.”

C-Store reported on Monday about a three-year extension to P&H’s supply contract with Tesco covering the distribution of tobacco products to every UK Tesco store, ambient non-tobacco lines to all the supermarket group’s petrol forecourt sites and frozen food lines, including in-store bakery, to more than 17,00 Tesco Expresses.