Tuesday 18 December 2018

Gary McGann rules out single listing for Aryzta

Gerard "Gary" McGann, chairman of Aryzta and former chief executive officer of Smurfit Kappa Group
John Mulligan

John Mulligan

A SINGLE stock market listing for troubled Swiss-Irish food group Aryzta is "not on the agenda", according to chairman Gary McGann.

Speaking after the group's annual general meeting in Dublin yesterday, the industry veteran also insisted that the only reason the group would contemplate a rights issue, where it would tap shareholders for cash, is if new chief executive Kevin Toland was struggling to execute his turnaround strategy because of any cash shortage.

"It would be the last option we'd look at having exhausted all other options," said Mr McGann.

He pointed to a potential realisation of Aryzta's 49pc stake in French frozen food firm Picard as an obvious way of raising funds.

"We have investments that are non-core, specifically Picard, which is a very substantial chunk of change," he said.

"We have activities that we've engaged in, in terms of dividends by way of scrip and hybrids in terms of cash delivery, and obviously the underlying business driver, which is the biggest cash generator; and all of that focused on deleveraging."

Mr McGann added that Mr Toland - who began as chief executive in September - hasn't yet drilled down into his strategy for turning around the group, which owns the Cuisine de France brand.

However, Mr McGann said at this stage there's no evidence that any cash call would be required of shareholders. "Principally, the concept of taking the easy path of asking the shareholders to throw in a few bob to help us out before the management have completed the things they should be doing to help the company out, I think is probably the wrong way round," said the chairman.

Aryzta has been battered for more than a year by profit warnings, the departure of its core executive team, and a debilitating exodus of staff working at its Cloverhill production facility in the United States. Some 800 staff at Cloverhill had been hired through a third-party agency, but lacked work visas and left following an immigration raid.

Aryzta has been weighing options for its Picard stake. This week, Aryzta also agreed the sale of its La Rousse Foods unit to Musgrave.

Picard has just priced €1.9bn of notes, with €110m earmarked for distribution to its shareholders.

"We've made it very clear that at the right time we won't be a shareholder," said Mr Toland of Aryzta's Picard stake.

"We will leave when we get a fair value, whether that's tomorrow or some time down the road."

Irish Independent

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