Faurecia: To refinance the takeover of Hella, Forvia raises funds at 15.50 euros per share

(BFM Bourse) – Faurecia, which is renaming itself Forvia after its takeover of the German Hella, is launching a capital increase of 705 million euros, in order to reimburse part of the debt contracted for this operation which made group one of the ten largest equipment manufacturers in the world.

Already deprived of a dividend this year, the shareholders of Faurecia – in the process of being operationally renamed Forvia, even if the action retains the historic name for the moment – are asked to get their hands on the portfolio in order to accelerate the repayment of the debt. from the takeover of Hella.

However, the most important of them have already committed to subscribe to the capital increase aimed at raising around 705 million euros announced by the company on Friday, after having indicated last month to postpone the operation due to the market conditions. Nearly a fifth of the amount sought is thus already covered by subscription commitments. In detail, the pool of Hella family shareholders (Hueck and Roepcke family), which has become Faurecia’s leading shareholder with 8.95% of the shares, as well as Exor (holding of the Agnelli family at the head of 5.1% of the capital ), Peugeot 1810 (Peugeot family, 3.1% of the capital) and Bpifrance (2.16%) will participate up to their respective shares.

The takeover of Hella (81.6% of the capital) by Faurecia, effective January 31, 2022, gave birth to the Forvia group, combining two profitable and “very complementary” companies in terms of technologies, customer portfolio and geographical coverage, with a critical mass and occupying world-leading positions, particularly in the electronics sectors. The total amount of the investment amounts to 5.4 billion euros (4.9 billion euros in cash and 500 million euros in shares).

39% DPS discount

In 2021, Forvia has already refinanced 2.5 billion euros, mainly through two bond issues for a total amount of 1.9 billion euros. The proceeds of the capital increase, for which the subscription period will run from June 9 to 17, i.e. approximately 705 million euros, will come in repayment of part of the bridge loan partially drawn down on January 31, 2022 and the balance of the bridging loan will be refinanced by bonds and/or bank loans as well as by the company’s own cash, cash that asset disposals should reinforce.

As indicated in the document, whose pedagogical clarity should be emphasized, that Faurecia is sending to all of its current shareholders, the operation will be carried out via the allocation of preferential subscription rights (DPS). Each investor will automatically receive on Tuesday as many DPS as securities he holds at the close of Monday 6, including those purchased on the same day.

Then, it will be necessary to exercise 10 preferential subscription rights to subscribe to 3 new shares at the preferential subscription price of 15.50 euros, which results in a discount of 33% compared to the theoretical value of the share excluding rights and of 39.1% compared to the closing price on June 1. The subscription period will run from June 9 to June 17.

Persons who do not wish to participate or only partially may resell their subscription rights, paying attention to the fact that the PDS trading period is delayed by two days compared to that for the subscription of new shares, i.e. between the 7th and the June 15. This DPS transfer mechanism thus makes it possible to compensate those who do not want to give back to the pot of the dilution they suffer. A DPS not exercised or sold loses all value after June 15th. Conversely, it is also possible to buy additional DPS if you wish to increase your participation or simply if you do not have a number of shares corresponding to a multiple of the number of DPS required.

In response to the announcement of the capital increase, Faurecia’s share price fell 5.37% to 24.15 euros on Friday around 10:20 a.m.

Guillaume Bayre – ©2022 BFM Bourse

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