Aryzta's board has called on its shareholders to support its plan to raise €800m in new capital at the baker's upcoming AGM - where it could run into opposition from its biggest shareholder.
Cobas Asset Management, which has a stake of more than 14.5% in the Swiss-Irish company, has described the fund raising as excessive.
Cobas said it would present less dilutive measures soon.
Aryzta said it needs the capital injection to reduce excessive debts and strengthen its balance sheet, and support its turnaround plan.
The company, which owns Cuisine de France and which also makes the buns for McDonald's hamburgers, lost more than $1 billion in 2017 after being been hit by rising costs in North America and weak consumer spending in some European markets.
"We believe that the proposed €800m capital raise is in the best interest of the Group and all of its stakeholders," chairman Gary McGann wrote in an invitation to shareholders for the event on November 1.
"It equips us to address the challenges facing Aryzta, implement our turnaround plan and progressively work to restore value for you, our shareholders," he said.
"The Board of Directors unanimously recommends that shareholders vote in favour of the capital increase resolution," Mr McGann urged.