Lion Capital, JP Morgan and Highbridge Capital Management, the backers of frozen food firm Findus Group, are seeking to pay themselves a dividend by raising a controversial and high-risk debt instrument two years after putting the company through a debt restructuring.

The frozen food group is raising a €200 million payment-in-kind note, which has been rated at just above default by rating agency Fitch. The proceeds of the PIK note will be used to repay preferred equity certificates held by the shareholders, according to a rating announcement from Fitch Ratings. Lion Capital, JP Morgan and Highbridge Capital Management are the largest shareholders in the firm.