Aryzta announces plans to raise £715m in capital

Aryzta is aiming to raise around £715m as part of plans to strengthen its presence in the frozen bakery market.

The move follows a profit warning in May and announcement of plans to reduce costs over the next three years as the business comes under pressure from increased labour and ingredient costs.

In a statement issued this morning (13 August), the company said it had undertaken a detailed review of its capital structure and would now approach shareholders with a view to raising €800m (£715m).

The additional funding will be used primarily to reduce debt, which Aryzta said would give it the strategic and financial flexibility it needed to implement its business plan and focus on the frozen bakery market.

Aryzta also reported that trading in its fourth quarter had been in line with expectations and with the guidance it gave in its profit warning in May.

The company added that it remained committed to its previously announced €1bn deleveraging plan, made up of a combination of cash flow generation and at least €450m of asset disposals. Aryzta said it had made solid progress with disposal of non-core assets and that it still planned to dispose of its stake in French retail group Picard.

“A significantly improved capital structure will provide Aryzta with the means to continue to take the necessary steps to reposition the business and deliver on our strategy,” said Aryzta chief executive Kevin Toland.

“Over the medium term, we expect to generate significant cash flow, which will be applied towards continued net debt reduction and to resource selective growth opportunities.”

In April, Aryzta appointed former Frieslandcampina chief operating officer Gregory Sklikas as CEO of its European business.

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