Covestro Outlines IPO Plans

Covestro has announced details of its proposed initial public offering on the Frankfurt stock exchange, now planned for October 2. The company will offer between 70.4 million and 94.3 million shares at a price ranging between €26.50 and €35.50. The subscription period will run from September 21 until probably October 1, 2015.

The number of new shares to be issued will depend on the price, which will be set according to a book building process. In this process, the underwriter strives to determine the offer price based on demand from investors. As part of the book building, 70.4 million shares will be offered at the top of the price range, 80.6 million will be offered in the mid-range, while 94.3 million shares will be available at the lower end of the price range.

Covestro is targeting gross proceeds of around €2.5 billion. Immediately after the capital increase, net debt together with pension liabilities should be approximately €4 billion.

CEO Patrick Thomas said: “After the ipo, we will be able to deploy our strengths more rapidly, effectively and flexibly and continue building on our competitive advantages.”

For the shortened fiscal year 2015, Covestro anticipates making a dividend payment of around €100 million to €150 million. “Our strong free cash flow is expected to support a sustainable dividend policy,” said Thomas, adding: “In the mid-term, we are forecasting further growth in sales and adjusted EBITDA.”