Aryzta shareholders narrowly approve plan to raise €800m

Shareholders in troubled Irish-Swiss food group Aryzta have narrowly approved a plan to raise €800m in capital.

The vote was passed by 53pc of shareholders at the group’s AGM in Zurich today.

The plan will see the group  increase its share capital through the issuance of 900,184,940 new registered shares with a nominal value of CHF 0.02 (€0.018) each.

The new registered shares will be offered to existing shareholders at a price of CHF 1.00 (€0.88) per share, a dilution of more than 80pc, according to investment bank Vontobel.

“Our worst case scenario was based on a capital increase at CHF 2 per share,” Vontobel analyst Jean-Philippe Bertschy wrote in a note before the vote.

“The dilution is substantial, as is the downside to current share price levels.”

Aryzta, whose CEO is Kevin Toland, plans to use €500m of the equity raised to repay an existing term loan, with €150m earmarked for its Project Renew plan designed to generate cost savings and introduce efficiencies.

However the proposal had been met with opposition by Cobas Asset Management, Aryzta’s largest shareholder.

Last month Cobas said that Aryzta would likely fail in its efforts to secure investor approval to raise the €800m.

In a damning missive, it claimed that the embattled food group was painting an “unduly grim picture” of its current situation “with the sole intent to convince shareholders to support the excessively large and dilutive capital increase”.

It added: “Based on our conversation with the largest shareholders, we deem a vote against the capital increase of €800m at the upcoming AGM as likely.”

Cobas controls almost 15pc of Aryzta.

At the AGM today shareholders also voted to re-elect the chairman Gary McGann.

(Additional reporting Bloomberg)

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