McDonald's hamburger buns maker Aryzta on Monday reported a full-year loss of €470 million ($545.01 million) as distribution and labour costs hurt the Swiss-Irish baking company.
The company, which reported a €907.8 million loss in 2017, is pushing ahead with its plan to raise €800 million in equity capital to reduce debt, despite some opposition from an activist shareholder.
Over 2018, Aryzta swapped out seven top executives after a turbulent year in which the company, among other challenges, was hit by raids on a Chicago bakery that employed undocumented workers and suffered from a failed spending spree that left it "overleveraged".
"We have now stabilised the company and are moving to fix the balance sheet," new Chief Executive Kevin Toland said on a call with reporters. "Over a period of time, Aryzta's strategy became unfocused."
Net debt stood at €1.5 billion on July 31.
Shareholders vote on 1 Nov on the capital increase.
Opposition
It has generated opposition from Switzerland's Larius Capital, a small shareholder. It is pushing Aryzta to sell more assets and reduce or even eliminate the capital hike.
Aryzta plans to sell its 49% stake in French frozen-food company Picard, Toland said, adding the transaction is taking time but has not been put on hold.
"Picard is a great business, we're just not a great owner of the business," Toland said.
He declined to comment on any push among shareholders to reduce the capital increase.
For that transaction, Aryzta has enlisted BofA Merrill Lynch and UBS to lead the process, with Credit Suisse, JP Morgan and HSBC Bank plc as additional joint global coordinators and Mizuho International plc, Rabobank and Credit Agricole CIB as joint bookrunners
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