French carmaker PSA Peugeot Citroën (PEUGF.PK) announced the launch of a capital increase with preferential subscription rights for a gross amount of 1.953 billion euros. The company set a subscription price of 6.77 euros per new share.
This Transaction is combined with the reserved capital increases to the benefit of Dongfeng Motor Group via Dongfeng Motor (Hong Kong) International Co., Limited or "DMHK" and SOGEPA (a company wholly owned by the French Republic) for a total amount of 1.048 billion euros, which are scheduled to settle on the date hereof, the free allocation of warrants detached on the date hereof and with the renewal of a 3 billion euros confirmed credit facility.
DMHK and SOGEPA committed to subscribe to the Transaction pro rata their respective stakes acquired in the reserved capital increases, i.e., 276 million euroseach. Their respective stakes will thus be maintained at approximately 14.1% of the share capital of PSA Peugeot Citroën following the completion of the Transaction.
FFP/EPF will also subscribe to the Transaction, for an amount of 142 million euros in order to reach following the completion of the Transaction a combined stake in the share capital of PSA Peugeot Citroën equal to those of DMHK and SOGEPA (i.e., approximately 14.1%).
The preferential subscription rights detached but not exercised by EPF and FFP, that is 53.79 million preferential subscription rights, representing approximately 11% of the total number of preferential subscription rights, will consequently be sold by EPF and FFP.
The remaining part of the rights issue not covered by the subscription commitments of DMHK, SOGEPA and FFP/EPF, that is 1.260 billion euros, will be underwritten by a banks syndicate led by Banco Santander, BNP Paribas, Citigroup, Crédit Agricole Corporate and Investment Bank, Deutsche Bank, HSBC, Morgan Stanley, Natixis and Société Générale Corporate & Investment Banking, acting as Joint-Global Coordinators, Joint-Lead Managers and Joint-Bookrunners.
The company stated that the capital increase with preferential subscription rights will result in a creation of 288.51 million new shares at a unit subscription price of 6.77 euros.
Each shareholder of Peugeot SA will receive 1 preferential subscription right per each share held at the close of trading day on 30 April 2014. The subscription price for the new shares has been set at 6.77 euros per new share (nominal value of 1.0 euros and issue premium of 5.77 euros), 12 preferential subscription rights giving right to subscribe 7 new shares by irrevocable entitlement. Subscriptions subject to reduction (à titre réductible) will be accepted.
The rights of the warrants holders, the exercise period of which will start on 29 April 2015 and end on 29 April 2017, will be preserved in accordance with legal and contractual provisions applicable to the warrants, by adjustment of their exercise ratio.
The subscription period for the new shares will run from 2 May 2014 to the close of trading on 14 May 2014. During this period, the preferential subscription rights will be listed and traded on the regulated market of Euronext in Paris. Preferential subscription rights that are not exercised before the end of the subscription period, namely before the end of the trading day on 14 May 2014, will lapse automatically.
Settlement and delivery of the new shares is scheduled to take place on 23 May 2014. The new shares are expected to be listed on Euronext in Paris on the same date.
Citroën said that it will use the proceeds of this rights issue to make key investments to implement its "Back in the Race" plan and to reinforce its competitive positioning in Europe and its globalisation strategy.
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