Shares up as Aryzta sells off US facilities
Shares in Aryzta gained as much as 5.9pc yesterday after the troubled Swiss-Irish bakery group said it will sell two US production facilities.
The sale is thought to be at a significant discount to the €100m price tag, but will bring cash into the business and so mitigate the risk of potential covenant breaches.
Last week Aryzta indicated it will realise losses of around €500m on the sale of assets in the coming months.
The company had said the sale of non-core assets was advanced and would generate more than €450m by July. The assets had been acquired for around €1bn.
Aryzta said it will sell its Chicago Cloverhill facility to Hostess Brands and its Cicero facility to Bimbo Bakeries.
Kepler Cheuvreux analyst Jon Cox warned last week that “it could be a close call” for Aryzta to be within its covenants at the end of full-year 2018 unless asset sales, including Cloverhill, go ahead.
Shares in the troubled Cuisine de France owner had slumped as much as 22pc on January 25 after it issued a fresh profit warning – the first under new chief executive Kevin Toland.
The food group has been trying to navigate its way out of trouble for the past year.
Mr Toland, the former chief executive of Dublin Airport operator DAA, took up the CEO mantle at Aryzta last September, and is charged with spearheading a turnaround programme – including exiting some businesses.
The market remains to be convinced however, with so-called short interest, or investors betting on a share price decline, surging in recent days, according to IHS Markit data.