- Placement with institutional investors of up to 166 million new and existing non-voting common shares of Schaeffler AG
- Shares to be listed on Frankfurt Stock Exchange
- Net proceeds for debt reduction
- Further strengthening of capital structure for future profitable growth
The new and existing non-voting common shares will be distributed broadly to institutional investors in Europe, North America and elsewhere through a bookbuilding process. Of the up to 166 million non-voting common shares, up to 100 million shares will be sold by Schaeffler Verwaltungs GmbH, a holding company of the Schaeffler family. A further 66 million shares result from a capital increase of Schaeffler AG. After closing of the transaction, the free float is expected to be approximately 25 percent.
“The intended placement and listing of non-voting common shares of Schaeffler AG is a milestone in the history of our company. At the same time it is the final step of the realignment of our capital and corporate structure. Thus, we have put in place the two-pillar model, which we have consistently worked on for several years, with a strategically focused holding company at the top”, explained Georg F. W. Schaeffler, Shareholder and Chairman of the Supervisory Board of Schaeffler AG.
Maria-Elisabeth Schaeffler-Thumann, Shareholder and Deputy Chairperson of the Supervisory Board, said: “The Schaeffler Group will remain a family business in the future. As shareholders we will take responsibility to further successfully develop our company in the interest of our customers, our suppliers, and our many employees.”
The proceeds of the issuance will be used to reduce financial indebtedness on both the level of Schaeffler AG and Schaeffler Holding. The purpose of the transaction is to sustainably improve the financial strength of Schaeffler AG and the Schaeffler Holding companies and, thus, to provide the basis for the continuation of the successful growth of the Schaeffler Group achieved over the last years. Klaus Rosenfeld, CEO of Schaeffler AG, stated: “Over the last years we have consistently focused the Schaeffler Group towards the capital markets. The planned listing is a strategic step to further reduce our indebtedness and to improve the capital structure. We thus obtain further financial flexibility to seize additional growth opportunities.”
Schaeffler AG aims to pay a dividend of 25 to 35 percent of the annual net income to shareholders, starting with the fiscal year 2015. In addition to the reduction of the indebtedness of Schaeffler AG through the proceeds from the listing, management has committed to repaying a further EUR 1 billion of debt from operating cash flow by 2018.
During the first half of 2015 revenues grew 4.9 percent at constant currency and 12.4 percent including the impact of currency translation, respectively. Against the backdrop of a weaker than expected market development over the summer months, in particular in the Automotive business in China, the company now expects revenues for the year 2015 to grow at approximately 4 to 5 percent at constant currency. Schaeffler expects to continue to achieve a strong profitability in the full year 2015 at a similar level compared to the first half of 2015. This does not include one-off items, such as costs for the transaction and already announced restructuring measures in the Industrial business.
Klaus Rosenfeld concluded: “Despite the slight decrease in the summer months we are on track to expand our business this year again and will thereby continue our long-term profitable growth.”
Forward-looking statements and projections
Certain statements in this press release are forward-looking statements. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial consequences of the plans and events described herein. No one undertakes any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. You should not place any undue reliance on forward-looking statements which speak only as of the date of this press release. Statements contained in this press release regarding past trends or events should not be taken as representation that such trends or events will continue in the future. The cautionary statements set out above should be considered in connection with any subsequent written or oral forward-looking statements that Schaeffler, or persons acting on its behalf, may issue.
These materials may not be published, distributed or transmitted in the United States, Canada, Australia or Japan. These materials do not constitute an offer of securities for sale or a solicitation of an offer to purchase securities (the “Shares”) of Schaeffler AG (the “Company”) in the United States, Germany or any other jurisdiction. The Shares of the Company may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”). The Shares of the Company have not been, and will not be, registered under the Securities Act.
In the United Kingdom, this document is only being distributed to and is only directed at persons who (i) are investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the “Order”) or (ii) are persons falling within Article 49(2)(a) to (d) of the Order (high net worth companies, unincorporated associations, etc.) (all such persons together being referred to as “Relevant Persons”). This document is directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this document relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.
Neither Schaeffler AG nor any of its shareholders intend to make any public offer of shares in Schaeffler AG in the United States, Germany or any other jurisdiction. It is only intended that shares will be placed with qualified investors and less than 150 non-qualified investors per EEA member state in the Federal Republic of Germany and certain other jurisdictions and subsequently admitted to trading on the regulated market segment (regulierter Markt) of the Frankfurt Stock Exchange with simultaneous admission to the sub-segment of the regulated market with additional post-admission obligations (Prime Standard) of the Frankfurt Stock Exchange and on the regulated market of the Luxembourg Stock Exchange. The Listing will be made on the basis of a prospectus that must be published in Germany and Luxembourg. The prospectus will be available free of charge on the Internet at www.schaeffler.com/ir.
In any EEA Member State other than the Federal Republic of Germany or Luxembourg that has implemented Directive 2003/71/EC (together with any amendment and any applicable implementing measures in any Member State, the "Prospectus Directive") this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive.
In connection with the listing of Schaeffler AG’s common non-voting bearer shares with preferred dividend payments with no par value (the “Placement Shares”), one of the underwriting banks (the “Stabilization Manager”) or its affiliates, will act, for its own account and the account of the other underwriting banks, as the Stabilization Manager. The Stabilization Manager may, acting in accordance with legal requirements, take stabilization measures to support the market price of the Placement Shares and thereby counteract any selling pressure.
The Stabilization Manager is under no obligation to take stabilization measures. Therefore, no assurance can be provided that any stabilization measures will be taken. Where stabilization measures are taken, these may be terminated at any time without notice. Such measures may be taken from the earlier of the date the Placement Shares are listed on the regulated market of the Frankfurt Stock Exchange or the regulated market of the Luxembourg Stock Exchange and must be terminated no later than 30 calendar days after such date (the “Stabilization Period”).
These measures may result in the market price of the Placement Shares being higher than would otherwise have been the case. Moreover, the market price may temporarily be at an unsustainable level.
Schaeffler Verwaltungs GmbH has granted the Stabilization Manager the option to sell to it up to 16,600,000 Placement Shares acquired through stabilization measures (the “Put Option”). The Put Option is exercisable on or before the end of the Stabilization Period.