Aryzta to repay remaining €347m of debt-equity bonds

Aryzta, the Zurich-listed baked goods business behind the Cuisine de France brand in Ireland, said plans to repay the final 325.4 million Swiss francs (€346.7 million) of hybrid debt-equity instruments as it continues to restructure its balance sheet following its tumultuous recent history.
The bonds, which are perpetual in nature as they have no set repayment date, will be redeemed with all outstanding interest paid on October 25th, the Swiss-Irish group said in a statement on Monday.
The deal will be funded through a combination of cash and borrowings from a new revolving credit facility agreed last month.
It will also bring an end to a type of debt on Aryzta’s balance sheet that had been a key area concern for the market when the group was the target of activist shareholders and a boardroom coup four years ago.
At the time, interest on the bonds was being rolled up and added to the principle, increasing the burden on the group.
Under the board that has been in place since late 2020 and led by chairman and interim chief executive, Urs Jordi, Aryzta has repaid €800 million in hybrid bond principal as well as deferred and compound interest.
This has been partly funded by cash from the sale of unwanted assets, including Aryzta’s former troubled North American business and its Brazilian unit.
[ Aryzta names its first permanent chief executive since 2020Opens in new window ]
Aryzta said that the hybrid bond repayments has allowed the group to improve its debt burden to below three times earnings before interest, tax, depreciation and amortisation (Ebida) and significantly reduce its financing costs. Its debt had stood at €1.89 billion in mid-2020, or 7.3 times Ebitda.
“The redemption of this [Swiss franc] hybrid bond reflects our prudent and disciplined financial approach towards improving our capital structure and reducing our interest costs,” said Mr Jordi, who will step down as interim CEO in January but remain chairman.
“It is consistent with our strategy to improve shareholder returns and reflects our continued confidence in our business.”
Aryzta named Michael Schai, a former managing director of Aryzta’s Asia-Pacific region based in Australia, in July as incoming group CEO, making him the first permanent CEO since 2020.
Shares in Aryzta rose a little over 1 per cent in Zurich on Monday morning, bringing their advance over the past 52 weeks to more than 15 per cent.