Aryzta CEO to quit as breadmaker eyes disposals to help balance sheet

ZURICH, Feb 14 (Reuters) - Frozen baked goods maker Aryzta (IOB: 0MFY.IL - news) 's Chief Executive Owen Killian is quitting as the company considers selling assets amid slumping sales of cookies and rising labour costs that have stretched its balance sheet, the Swiss-listed company said.

Its shares were indicated 15 percent higher in premarket activity. The stock has lost nearly two-thirds of its value since March 2015, trimming Aryzta's market cap to just 2.73 billion Swiss francs ($2.72 billion).

Killian will exit at the end of the fiscal year in July, along with Chief Financial Officer Patrick McEniff and John Yamin, head of Aryzta Americas, it said on Tuesday.

The company also announced it had boosted its net debt covenants, a move giving it more financial flexibility but potentially increasing borrowing costs by up to 50 basis points.

Aryzta plans to evaluate alternatives for its 49 percent stake in French food retailer Picard, bought less than two years ago, saying any proceeds would go to strengthening its balance sheet.

Created by the tie-up of Ireland (Other OTC: IRLD - news) 's IAWS Group and Switzerland's Hiestand Holding, the world's biggest maker of frozen baked goods is being forced to retrench as competition from rivals including U.S.-based Hostess eats into its Otis Spunkmeyer cookie brand.

Labour costs are also squeezing margins, the company has said.

($1 = 1.0040 Swiss francs) (Reporting by John Miller, Editing by Michael Shields)