The cable manufacturer wants to reposition itself financially.
(Photo: dpa)
Munich The shareholders of the ailing auto supplier Leoni have to prepare for a massive dilution of their shares. “The ongoing negotiations suggest that there will be no solution without a capital cut by the shareholders,” Leoni said in a mandatory announcement on Friday. Part of the mountain of debt that is too high could be converted into equity in the course of a capital cut. The share collapsed by a third to only 4.00 euros at times.
Leoni’s previous refinancing concept fell through because the planned sale of the cable business failed at the last minute. Solutions will now have to be found that are painful for everyone involved, said the outgoing Leoni CEO Aldo Kamper in the Munich Business Press Club. Leoni has debts of well over a billion euros.
According to information from financial circles, the creditors could take over around 90 to 95 percent of the shares in the course of a so-called debt-equity swap. The Handelsblatt had previously reported on the basic plan.
The mandatory notification said: “From today’s perspective, it can be assumed that the prerequisite for the refinancing solution will be a capital reduction followed by a capital increase.” However, the exact structure is still open. Existing shareholders would be largely diluted if the plans were implemented.
According to Leoni, it has started talks with its major shareholder, the Pierer Group. The latter had declared that “under certain conditions they wanted to make a significant contribution to the restructuring as part of the equity injection”.
Renovator Ziems is conducting the negotiations
A few days earlier, Leoni CEO Kamper surprisingly announced his departure in the middle of the restructuring phase. The Dutchman takes over the CEO position at the sensor and chip group AMS-Osram, for which he had worked for a long time before moving to Leoni.
The company is not without a leader, said Kamper. The restructuring expert Hans-Joachim Ziems, who recently returned to Leoni’s board, is leading the negotiations with the banks anyway.
>> Read about this: Leoni CEO Aldo Kamper leaves ailing auto supplier
Kamper’s contract was only extended a year and a half ago. The timing is “of course not nice,” said the Leoni CEO. But returning to Osram, for which he had worked for 22 years before moving to Leoni, was too attractive an offer. “My heart already beats for semiconductors.” At Osram, he was most recently in charge of the chip division.
An essential part of the Leoni refinancing concept by the end of 2025 should actually be the sale of the cable division Business Group Automotive Cable Solutions to the Thai Stark Corporation.
The unit, which recently achieved sales of around 1.3 billion euros, was valued at almost 600 million euros. More than 400 million euros should flow to Leoni after deduction of financial liabilities and pension costs. However, the Thais backed down shortly before the transaction was completed.
Cable business will probably not be sold
The division will probably remain with Leoni. There are advantages to having your own cable division as a wiring system specialist, said Kamper. “We now need a resilient solution that also works without a sale.” According to estimates by the creditor banks, a price like Stark would have paid could no longer be achieved in the current environment anyway.
Leoni is considered systemically important in the automotive industry. The company had already overtaken itself with unbridled growth before Corona. Under Kamper, the company made progress in restructuring. But when the pandemic broke out, Leonie was one of the first companies in Germany to apply for state aid. When the company had to interrupt the production of cable harnesses in the Ukraine after the outbreak of war, the assembly lines at car manufacturers also came to a temporary standstill. This is also why the banks have an interest in a solid solution for Leoni.
Kamper said he was confident that Leoni would be able to operate successfully once the debt issue had been clarified. “A recovery of Leoni is basically possible.” In any case, the rescue should not fail due to the demand. The business situation in the auto industry improved significantly in January, as the Ifo Institute reported on Friday. The corresponding indicator rose significantly, and expectations for the coming months were positive again for the first time in around six months.
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