The largest shareholder in ARYZTA is calling on management to hold an extraordinary general meeting to vote on the investor’s alternative financing plan to restore the bakery giant to health.

Spain-based Cobas Asset Management owns 14.5% of loss-making Aryzta, which is aiming to raise EUR800m (US$926.5m) to revitalise the dual-listed firm and cut billions of euros in debt. Shareholders are due to vote on the capital-raising plan at an annual general meeting on 1 November.

However, having presented what it called an alternative “beneficial” financing plan, Cobas said today (15 October) Aryzta has rejected adding the investor’s proposal to the AGM agenda.

“Consequently, Cobas has asked Aryzta’s board of directors to call an EGM to present this proposal directly to all shareholders, subject to the majority of the shareholders rejecting the proposed EUR800m capital increase in the forthcoming AGM. We expect the board of directors to call the EGM as soon as possible.

“However, should the majority of shareholders unexpectedly support the directors’ proposed EUR800m increase at the AGM, Cobas intends to fully exercise its pro-rata share in the rights issue to emphasise its full support towards Aryzta at all times.”

A spokesperson for Cobas told just-food today, in response to media reports the asset manager had increased its stake in Aryzta, there had been no change to the holdings.

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Aryzta responded to Cobas’ call for an EGM in its own statement today: “The Board of Directors will analyse the request and proposal and will publish its position and the date of the extraordinary general meeting in due course. 

“The Board of Directors and the Executive Committee unanimously believe that a capital raise in an amount of EUR800m is in the best interests of Aryzta, a majority of its shareholders and its other stakeholders, is the financing option and transaction which has the highest probability of success for Aryzta and all stakeholders, including its shareholders and is the only proposal that addresses the critical issue of commercial confidence in the Group.” 

Cobas has said it would support an alternative EUR400m capital increase and is asking the Aryzta board to seek the sale of some non-core assets, an option the chief executive of the bakery group, Kevin Toland, has already put in motion with the sale of its Cloverhill bakery business, its stake in Signature Flatbreads and the disposal of Irish foodservice supplier La Rousse Foods.

Toland has hinted more business disposals could be in the pipeline, including the sale of Aryzta’s stake in French frozen food retailer Picard. Earlier in October, the CEO said he was “committed” to selling the shares.

Cobas today insisted “serious expressions of interest from third parties for several assets have already been received”.

It added: “Non-core assets amounting to at least EUR250m in value, for which a ready buyer at a reasonable price is available, could be disposed of in a very short time frame.

“This alternative proposal of raising EUR650m (EUR640m net of expenses) significantly improves the outlook for shareholders in the medium term in comparison to the EUR800m (EUR750m net of expenses) proposed by the board.”

Cobas added its alternative plan would increase Aryzta’s value per share by 30%, compared to the bakery’s capital raising currently on the table.

In addition, the investor is calling for the company to seek a credit rating and consider other financial structures such as subordinated debt or bonds. Aryzta could realise EUR1bn in 12 months from the sale of non-core assets, including Picard, Cobas said.

“If for any unforeseeable reason the company would still require further funding, we are prepared to back the Company with up to a EUR400m additional capital increase in the next 12 months, if properly explained.”

For an analysis of Aryzta’s results and financing plans by just-food: Has Aryzta found right mix to grease recovery wheels?