Australian food manufacturer Goodman Fielder, which last month reported falling annual profits, plans to raise A$259m (US$257.5m) to bolster its balance sheet.

Goodman Fielder shareholders will be able to buy five shares for every 12 that they own in the company.

The bakery and dairy manufacturer said yesterday (27 September) that the move would “ensure greater balance sheet flexibility … so it can pursue medium- and longer-term value-accretive initiatives” and “provide under additional headroom under [its] financing facilities”.

The share issue comes as CEO Chris Delaney, who took the job in July, conducts a review of Goodman Fielder’s operations. The company plans to provide an update on the review in November but has revealed that it is proposing restructing its three divisions in New Zealand to a “single market-facing business”.

Goodman Fielder said its board believed the share issue was a “necessary step to strengthen the company’s balance sheet in expectation of future restructuring and operational initiatives”.

Last month, Goodman Fielder reported a slump in annual profits after raw-material costs and lower sales hit earnings.