Aryzta trustee hits back at company over rights issue debacle

A share register trustee company has hit back at claims by Aryzta that it was to blame for several hundred Irish shareholders missing out on a recent rights issue by the Swiss-Irish food giant.

Link Asset Services, which was initially held responsible for failing to notify up to 300 Irish investors of how to go about claiming their options before last month’s deadline, said it was Aryzta’s duty to inform shareholders directly and that it had acted in accordance with its contractual obligations.

"Under the terms of the transaction documentation entered into between the trustee and the company, the company was required to provide notice of all matters relating to the company and the company's shares direct to holders. It did not do so," Link said in the letter to shareholders seen by The Irish Times.

It also claimed that Aryzta had only notified it of the final terms of the rights offer days before the deadline and that attempts to obtain some return for shareholders in the event that instructions could not be provided or processed within the timeframes had proved unsuccessful.

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“To this end, the trustee has taken independent legal advice on this matter and considers that it has acted in full in accordance with its legal, fiduciary and contractual obligations,” it said in the letter, while noting it was reviewing options open to the impacted shareholders.

Missed deadline

Last month Aryzta successfully completed a €790 million rights issue to pay down debt and strengthen its balance sheet.

However a significant cohort of Irish shareholders, who had elected to be notified by post, missed the deadline after the letter informing them how to take up their rights arrived too late.

They now find themselves with a stake in the company that is worth less than 10 per cent of what it was before the rights issue. This is also after suffering a near 95 per cent collapse in the value of their investment over the past two years driven by a series of profit warnings.

The investors affected were originally shareholders in listed Irish food and agricultural supplies group IAWS, which merged in 2009 with Swiss rival Hiestand Holding to form Aryzta.

The food group, however, blames Link for the debacle. “The bottom line is that Link has a responsibility to those in the trust; and it was not ready despite materials being sent out on October 11th,” it said, noting other shareholders were able to participate in the rights issue through their relevant custodians.

“It became apparent to Aryzta that Link was not prepared for the rights issue – despite relevant information being distributed on October 11th to all shareholders,” the company said.

It also noted that only Link knows the identity of those shareholder involved.

Following the commencement of the right issue timetable, it said Link sent instructions to investors but “the time it took to send the letter and deliver it by post resulted in a number of holders being unable to trade or exercise their rights”.

The company said it proposed a number of options to Link to try to mitigate the issue “none of which they were able to accept”.