Swiss-Irish bakery group ARYZTA has received the backing of three influential corporate guidance advisory groups for its plan to raise EUR800m (US$921.4m) to revitalise the loss-making business and cut billions of euros in debt.

The group, which makes buns for McDonald’s burgers and Cuisine de France bread, has been under pressure from its largest shareholder, Cobas Asset Management, which has proposed an alternative restructuring plan.

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But now advisory firms ISS, Glass Lewis and Ethos have all recommended the EUR800m capital increase in line with the Aryzta board’s recommendation.

They believe a capital raise is the financing option and transaction which has the highest probability of success for Aryzta and all stakeholders and “is the only proposal that addresses the critical issue of commercial confidence in the group”, the bakery group said in a statement this morning (22 October).

Aryzta said the money is required in order to strengthen its balance sheet, provide necessary liquidity and working capital funding, provide the group with the time and financial flexibility to deliver on its multi-year turnaround plan and enable the company to maximise the value of its non-core asset disposals for further net leverage reduction.

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Spain-based Cobas, which owns 14.5% of the company, has proposed Aryzta should instead look to raise EUR400m and sell-off some non-core assets. In a statement, the asset manager said the bakery business could generate at least EUR250m from such disposals, “for which a ready buyer at a reasonable price is available”.

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Shareholders are expected to vote on the plan at an annual general meeting slated for 1 November.