SGL Group Completes Equity Increase

Germany's SGL Group has completed its capital increase announced at the end of September. The company said the 0.18 million new shares offered were nearly all subscribed and have been included in stock market trading since Oct. 14.

As 99.65% of the subscription rights were exercised by the rights holders, there will be no rump placement. The remaining number of new shares not subscribed will be dribbled-out through sales in stock exchange transactions.

Based on the pre-agreed subscription price of €13.25, gross proceeds total €267.4 million. The transaction supported by main shareholders SKion (27.53%) BMW (18.49%) and Volkswagen (9.94%) has increased the equity ratio to above 30% and improved gearing to 0.46, management of the Wiesbaden-based carbon group said.

Members of the managing board also acquired shares worth around €1 million as part of the capital increase. This is said to be equivalent to more than 50% of the aggregate basic salary of all of the board's members.

SGL said the equity increase is part of its strategic realignment program in response to sinking profits. The managing board will continue to "consequently implement" the planned cost savings program, which foresees restructuring or ending loss-making activities, while at the same time focusing resources in all business areas on value-creating activities and increase profitability.

Proceeds from the transaction are expected to strengthen the balance sheet and improve the leverage ratio to below 2.5. The new financial flexibility will be used for general business purposes and to repay outstanding debt, SGL said.

The company expects its SGL2015 cost savings program with a target of €150 million to be "substantially exceeded."