One billion euro rights issue by Pernod Ricard to get out of debt

Pernod Ricard is putting debt-cutting at the top of its agenda as it refinances last year's acquisition of Absolut vodka maker Vin & Sprit in still tough credit markets, and as its trading deteriorates.

 The French drinks giant is doubling the cash it is raising to pay down its high debts by launching a 1 billion euro ($1.32 billion) rights issue in addition to a sell-off programme for the same amount, while at the same time warning on profits for its current year. "A one billion euro rights issue would be a step towards bringing the group to more manageable debt levels amid the difficult economic environment," said Goldman Sachs analyst Javier Gonzalez Lastra. "The world has changed since Pernod's acquisition of Absolut last July. The appetite from investors for debt has changed regardless of the company," said one industry analyst. Other analysts said while the rights issue helps address the major part of Pernod's debt refinancing needs until July 2013, there are concerns on the trading front.