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Aryzta enters into a standby underwriting agreement
Posted on Tuesday, 11 September 2018 11:56
Swiss specialist food company Aryzta has entered into a standby volume underwriting agreement regarding its proposed EUR 800.00 million rights issue in the fourth quarter of 2018 to bankroll the steps necessary to reposition the business.
The struggling group said in August it had “undertaken a detailed review of its capital structure” with the assistance of Bank of America Merrill Lynch, UBS and Rothschild “in order to create the necessary strategic and financial flexibility to implement its strategy”.
Proceeds from tapping shareholders for cash will reduce debt, which stood at net USD 1.72 billion, as of 1st August 2017, as part of a commitment to a planned EUR 1.00 billion deleveraging target over four years.
This includes at least EUR 450.00 million in disposals and the balance from cash flow generation by the end of this financial year, being the 12 months to 31st July 2018.
Aryzta has also won shareholder consent to amend an existing credit and loan facilities agreement “to provide additional flexibility to pursue its new business strategy”.
Certain changes include an additional test of covenants at the end of FY 2019 – if the rights issue is not successfully completed by 31st May 2019.
As an international bakery, Aryzta has operations in North America, Europe, Asia and South America, as well as in the Oceanic countries of New Zealand and Australia.
The proposed rights issue would be one of the largest announced by a Western European company so far this calendar year, according to Zephyr, the M&A database published by Bureau van Dijk.
It would rank third alongside Capita, which completed its own equity dilution comprising a 59.9 per cent stake in May, and, should it go ahead, would also be one of the top 20 by value globally in 2018 to date.
© Zephus Ltd