Business Irish

Wednesday 20 March 2019

Aryzta €800m capital raise 'in the best interest of all stakeholders' – board

Aryzta CEO Kevin Toland
Aryzta CEO Kevin Toland
Ellie Donnelly

Ellie Donnelly

Troubled Irish-Swiss food group Aryzta has confirmed its plan to raise €800m in equity, despite opposition from shareholder Cobas Asset Management.

Commenting on the decision, Gary McGann, chairman of Aryzta, said that the board has put forward a detailed, multi-year turnaround plan "which is in the best interest of all Aryzta stakeholders."

"In the absence of an €800m capital raise, Aryzta will be unable to fully implement this plan, put the business back on a profitable growth path and rebuild value for all shareholders," Mr McGann added.

The funds raised will be used to repay debt of approximately €500m, provide additional working capital funding; and provide €150m funding to execute the group’s 'Project Renew.'

Following the capital raise, the group’s total capital structure leverage would remain above five times.

However, the board said that it believes that a strengthened balance sheet, with a better debt maturity profile, and additional liquidity and working capital funding, provides the group with the time and financial flexibility to deliver on its multiyear turnaround plan.

It added that, in the absence of the capital raise, the group would be subject to "significant" commercial, operating, and financial risk, and may have insufficient liquidity and working capital to sustain its business in the medium-term.

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