KPN’s cut-price share sale set to raise €3bn

KPN yesterday launched a heavily discounted €3bn (£2.53bn) rights issue to help the debt-laden telecoms firm fight tough competition and recover from a costly frequency auction.

The two for one share issue is at €1.06 per share, a 35.1 per cent discount to an ex-rights price, a theoretical share price following the issue.

KPN said Carlos Slim’s America Movil, which holds almost a third of the company, has committed to subscribe to the issue.

The company has outstanding debts of €13.5bn. It has already sold a €2bn hybrid bond and disposed of a string of assets to keep its debts under control.

Earlier this week it cancelled its dividend for this year and next after its core profit fell 12 per cent.

“With a discount of 35 per cent it makes a lot of sense to join in to the rights issue,” an Amsterdam-based analyst said yesterday.

The rights offering is fully underwritten by a syndicate of banks led by Deutsche Bank, Goldman Sachs and JP Morgan acting as joint global coordinators and joint bookrunners.

ABN Amro, ING and Rabobank International are acting as joint bookrunners; Barclays, BofA Merrill Lynch, Citigroup and UBS are acting as co-bookrunners and BNP Paribas, Credit Suisse, Societe Generale and UniCredit are the co-lead managers, while Rothschild is acting as financial adviser to the company.