Lion Capital in talks about Findus break-up Private equity investor Lion Capital is in advanced talks to break up Findus in a move to avoid breaching the terms of the UK frozen food maker's £700m debt load. Lion Capital and its Rothschild financial advisers are in talks with three consumer groups, including Nestlé, of Switzerland, over a sale of Findus's Nordic operations, two people close to the situation said. Such a deal could fetch €700m-€800m, which could be used to drastically reduce the company's debt. The other two strategic bidders are Orkla, the Norwegian consumer goods group, and Lerøy Seafood Group, the leading exporter of seafood in Norway by revenues. Lion Capital, led by former Goldman Sachs banker Lyndon Lea, is hoping to strike a deal with one of the three groups within the next four weeks, in time to cure a likely breach of Findus's debt covenants at the end of the fourth quarter. The consumer-focused private equity investor halted earlier discussions about a break-up a few months ago but the prospect of a covenant breach had prompted it to reinvigorate the negotiations shortly before Christmas. Lion Capital bought Findus three years ago in a £1.1bn deal that left the owner of the Young's seafood brand highly indebted. The deal added to a string of frozen food buy-outs as private equity groups were counting on the sector's supposed immunity against a recession. But Findus's UK business has not lived up to expectations as it has been pressured by price pressure from retailers, which hit the group's market-leading private label chilled fish and seafood business in particular. Currency volatility and rising costs for fish and other raw materials have further strained the business, forcing Lion Capital to inject additional capital into the business one year ago. The frozen food maker, which made a net loss of £151.6m in 2010 after high interest payments for its £721m net debt ate into operating profits, has reacted to its crisis by cutting jobs and closing manufacturing sites. Findus employs 6,000 people and produces 345,000 tonnes of food each year at 21 plants. The Nordic operations are seen as the jewel in the crown as it is a market leader by revenues in its segments in Norway, Finland and Sweden. About a third of Findus's £1.1bn in overall revenues in 2010 came from the Nordic region, according to its annual report. Findus's debt woes add to several setbacks for Mr Lea, who made his name by turning UK shoe maker Jimmy Choo into an international luxury brand. Last month, the private equity group lost much of its investment in La Senza, the high street lingerie chain, after it was sold to Middle Eastern investors via a pre-pack administration. After two years of fundraising, Lion Capital has so far failed to reach the €2bn target for its third buy-out fund.