With almost €380m wiped off the value of Aryzta in the last two weeks, the speciality bakery group and owner of the Cuisine de France brand has announced plans to raise up to €800m through a rights issue.

Special price

This would see it planning to issue shares at a special price to its existing shareholders.

Shares have dropped more than a third since the start of August, as market fears mount around the company’s debt.

The baker, which has debts of €1.6bn, expects to make earnings of between €296m and €304m in its 2018 financial year. This leaves it very highly leveraged, with a debt five times its earnings. The group continues to say it is meeting its covenants with its banks.

Shares set a new low during Tuesday’s trading when they reached €7.15

Should shareholders support the rights issue, which is planned for before year end, it would use the funds to reduce debt. Aryzta CEO Kevin Toland said: “A significantly improved capital structure will provide Aryzta with the means to continue to take the necessary steps to re-position the business and deliver on our strategy.”

The group is planning to dispose of its 49% stake in the speciality French food business Picard, for which it paid €450m in 2015.

New low

Shares set a new low during Tuesday’s trading when they reached €7.15. Over the last year, the share price is down 71%. Shares peaked in 2015 at €72.