Greencore has completed its withdrawal from the British bread market with the sale of its Rathbones Bakeries subsidiary for €30 million.

The food group plans to use the proceeds from the sale to reduce its debt and to support further investment in its convenience food business.

Rathbones, a private label bakery supplier operating eight bakeries in England and Wales, is being sold to Finedon Mill Limited. Under the terms of the deal, Greencore will receive €18.5 million upon completion of the sale and a further €11.5 million in deferred payments.

Of the deferred payment, €4.6 million is payable in monthly instalments of €150,000 from September 2004, with the balance of €6.9 million due on April 1st, 2009.

Greencore said a commercial rate of interest would apply to the latter sum.

The group said that in all, it had realised €47 million from exiting the British bread business.

Greencore has been experiencing difficulties in the division for some time, losing €0.4 million in the year ended September 26th last on turnover of €102.8 million.

The company already disposed of its Milton Keynes bakery in May 2002 for €17 million and did not re-invest the bulk of the insurance proceeds following a fire at its Trafford Park bakery last September.

Greencore chief executive Mr David Dilger described the sale as "a positive development for the group, both commercially and financially".

"This further sharpens the focus of resources on our convenience food categories which have strong growth prospects and leading markets positions."

Shares in Greencore closed slightly lower yesterday, down two cents or 0.7 per cent at €3.08.