Aryzta Row with Top Investor Deepens over EUR800m Capital  Hike

Aryzta’s row with its largest shareholder, Cobas Asset Management, deepened as the investor said the Swiss-Irish baking company was painting “an unduly grim picture” of its financial situation to ram through a disputed capital hike.

In response, Aryza’s board said Cobas’s counter proposals were inadequate to solve the company’s funding issues and too risky, according to Reuters.

Last week, Aryzta stood by its plan to raise EUR800m (USD916m) in new equity to meet its liquidity and financing needs, criticizing Cobas’ counterproposal to raise only half that amount as inadequate and risky.

Spain’s Cobas, which has a 14.5% stake in the maker of McDonald’s hamburger buns, favors an EUR400m capital increase and the sale of non-core assets it contends could raise a further EUR250m.

Cobas expressed disappointment, saying Aryzta CEO Kevin Toland had not engaged shareholders as the company seeks to raise new money to cut debt and strengthen its balance sheet. The baking company is reeling from a failed expansion strategy that has led to hundreds of millions of euros in losses.

“We believe that the company now is drawing an unduly grim picture of the current situation with the sole intent to convince shareholders to support the excessively large and dilutive capital increase,” Cobas said in a statement.

Aryzta late on Tuesday (October 23) said it rejected Cobas’s comments and urged shareholders to disregard Cobas’s proposal.

“The board believes the Cobas proposal for an EUR400m rights issue is inadequate, adds significant commercial and financial uncertainty and will not adequately address the company’s needs,” Aryzta said in a statement.

More on this story: Aryzta Dismisses Shareholder’s Plan For Smaller Capital Increase