The Swiss-Irish food company Aryzta, which is known in Ireland for owning the Cuisine de France brand, recently announced plans to clear its remaining hybrid debt-equity instruments, amounting to 325.4 million Swiss francs (€346.7 million). The move is part of the firm’s ongoing balance sheet overhaul following a tumultuous past.
The bond debt, which is perpetual owing to its indefinite repayment date, is set to be fully repaid with all outstanding interest on October 25th, according to a statement issued by Aryzta on Monday. The repayment will be facilitated through a blend of cash reserves and borrowings from a revolving credit facility secured in the previous month.
Paying off this form of debt will conclude a period of financial struggle that had caused market anxiety due to activist shareholders and boardroom upheaval four years ago, as Aryzta struggled with a mounting debt burden from interest accumulation.
Since a new board was installed in late 2020, led by Urs Jordi, acting as both chair and interim CEO, Aryzta has discharged €800 million in principal hybrid bond debt alongside accumulated and compound interest. This was partially funded through the cash influx from disposing of non-performing assets, which included Aryzta’s beleaguered North American division and its Brazilian operations.
With the hybrid bond debt clearances, Aryzta reports it has managed to lower its debt load to under thrice its earnings as determined by EBITDA, and significantly lower its financing expenses. The company’s debt was previously recorded at €1.89 billion in mid-2020, equivalent to 7.3 times EBITDA.
Mr. Jordi described the Swiss franc hybrid bond payment as a testament to Aryzta’s judicious and disciplined approach to improving its capital structure and interest expenses. He announced plans to step down as interim CEO from January while maintaining his position as chairman.
The entity announced Michael Schai, the ex-managing director of Aryzta’s Asia-Pacific division based in Australia, as the incoming group CEO in July, marking its first permanent CEO appointment since 2020.
Aryzta shares experienced a modest increase of just over 1 per cent on Monday in Zurich, contributing to an overall increase of over 15 per cent throughout the past year.