Heidelberg in 2.5bn issue to ease debts
HEIDELBERGCEMENT has unveiled a large capital raising that is likely to raise around €2.5bn (£2.2bn), as the German cement firm scrambles to slash its €11.3bn debt mountain.
The firm said it plans to boost its capital by 50 per cent by issuing 62.5m new shares in a rights issue of one new share for each two existing ones.
Under the plans, the Merckle family is set to reduce its 72.4 per cent stake in the debt-laden company to a minority holding, after it said it will transfer its rights to the new shares to the banks managing the capital increase.
In addition, the family – led by Ludwig Merckle – plans to sell 62.5m existing shares which, according to sources familiar with the deal, could see its stake shrink to less than 20 per cent. The firm’s shares fell three per cent to €41.90 yesterday on news of the rights issue.
Banks managing the capital injection have seen keen interest from prospective buyers and have fielded informal requests for individual stakes of more than three per cent, sources said yesterday.
HeidelbergCement – part of the business empire built by Ludwig Merckle’s father Adolf Merckle, who committed suicide in January – had previously divulged plans to sell non-core assets and bring in an outside investor.
HeidelbergCement won a €7.24bn lifeline from creditors in June, to restructure its debt which was inflated by the €9.65bn takeover of UK rival Hanson in 2007. Merckle also pledged to sell Ratiopharm, the world’s fourth-largest generic drugs maker, to further cut the family’s debt.