Aryzta repays remaining €347m of debt-equity bonds

Aryzta, the Zurich-listed baked goods business behind the Cuisine de France brand in Ireland, has repaid the final 325.4 million Swiss francs (€346.2 million) of hybrid debt-equity instruments as it restructures its balance sheet following its tumultuous recent history.
The bonds, which were perpetual in nature as they have no set repayment date, were redeemed with all outstanding interest paid, the Swiss-Irish group said in a statement on Friday.
The deal was funded through a combination of cash and borrowings from a new revolving credit facility agreed in September.
It brings an end to a type of debt on Aryzta’s balance sheet that had been a key area of 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 principal, 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 €880 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 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.
“This is an important milestone for Aryzta,” said Mr Jordi. “Our hybrid bond redemption programme has significantly benefitted shareholder returns.
“This latest hybrid bond redemption further improves our capital structure and is expected to deliver €11.5 million interest cost savings in 2025. Our progress in redeeming the hybrid bonds reflects our continued focus on business performance improvements and cash generation.”