Financing concerns have knocked £150 million off the market value of Hovis bread maker Premier Foods.

Shares fell to a record low on Friday, losing 18% at one point, on market rumours that investors may to cough up cash to tackle the company's debt.

Premier Foods said it was 'not contemplating' a rights issue and assured investors that it did not expect to breach its financial covenants.

The St Albans-based business owes around £1.75 billion following its £1.2 billion acquisition of Mr Kipling firm RHM last year, and its £450 million deal for the UK arm of Oxo and Homepride company Campbell's Soup in 2006.

Stockbroker Shore Capital warned over this debt burden, an £89 million pension deficit and record high wheat prices adding to cost pressures.

It also highlighted heavy promotional pressure on Hovis - bought as part of the RHM deal in 2006 - from rivals such as Warburtons and Allied Bakeries, as well as a more difficult climate for food companies this year.