Shares in Aryzta, the speciality bakery group and owner of the Cuisine de France brand, dropped almost 10% in trading early this week to hit new lows on the back of mounting investor concerns around the group’s debt position.

The latest weakening in Aryzta shares came after market analysts said the group would need to raise fresh capital in order to offset its current net debts of €1.6bn. Analysts also warned that rising grain prices due to the current heatwave in Europe, coupled with the continued high price for butter, would result in significantly higher raw material costs for the bakery giant.

This follows from last week when Fitch, the ratings agency, criticised the “opportunistic behaviour” of Aryzta and Lion Capital, for forcing their jointly owned subsidiary company Picard to issue new debt in order to pay a dividend to its two shareholders.

Aryzta received a dividend of €35m from the debt issue, on top of the €54m it received from Picard in the first half of the year.