September 18, 2015
Covestro offers shares for between EUR 26.50 and EUR 35.50
- Subscription expected to run from September 21 until October 1, 2015
- Gross proceeds of about EUR 2.5 billion anticipated
- Capital increase through the issue of new shares
- First listing on the Frankfurt Stock Exchange planned for October 2
Covestro AG, a world-leading polymers producer, is planning its stock market
flotation at the beginning of October 2015. By way of a capital increase, the
company will offer between 70.4 million and 94.3 million new shares at an issue
price of between EUR 26.50 and EUR 35.50. Covestro is targeting gross proceeds
of about EUR 2.5 billion. The number of shares to be issued in the Initial
Public Offering (IPO) will depend on the issue price. The subscription period
for the shares will run from September 21 until probably October 1, 2015. The
issue price will be set on the basis of a bookbuilding process and the first
listing in the regulated market segment (Prime Standard) of the Frankfurt Stock
Exchange is planned for October 2.
The new bearer shares (ISIN DE0006062144, ticker symbol 1COV) will be offered
publicly in Germany and Luxembourg to private and institutional investors.
Private placements are planned in other countries. The details of the offering
have been defined by Covestro (formerly Bayer MaterialScience) and Bayer AG as
a shareholder together with Deutsche Bank and Morgan Stanley, the two joint
global coordinators for the transaction.
"We have prepared intensively for our independence and think our company is
ready for listing. After the IPO, we will be able to deploy our strengths more
rapidly, effectively and flexibly and continue building on our competitive
advantages," explained Covestro CEO Patrick Thomas.
In the bookbuilding process, 70.4 million shares are to be offered at the top
end of the price range. In the mid-range, the offering will comprise 80.6
million shares, while 94.3 million shares will be available at the lower end of
the price range.
Retail investors can submit offers until the anticipated close of the
subscription period at 12:00 midday Central European Summer Time (CEST) on
October 1. Institutional investors have until 2:00 p.m. CEST on the same day.
On conclusion of the transaction and assuming the placement of all the shares
offered at the respective prices, the free float would be about 34 percent at
the top end of the price range, approximately 37 percent at mid-range and
around 40 percent at the lower end of the range. Stabilization measures
equivalent to as much as 10 percent of the emission volume are possible.
Covestro will use the proceeds from the IPO primarily to repay its debt to
Bayer and thus establish its target capital structure. Immediately after the
capital increase, net debt together with pension liabilities should be around
EUR 4 billion. With target net debt together with pension liabilities at 2.5 to
3 times adjusted earnings before interest, taxes, depreciation and amortization
(EBITDA) for fiscal 2015, Covestro is seeking an investment-grade credit
Sustainable dividend policy envisaged
Covestro intends to share its commercial success with its stockholders by way
of dividend payments. For the shortened fiscal year 2015, a dividend payment of
around EUR 100 million to EUR 150 million is envisaged. From fiscal 2016
onward, the company is planning dividend payments of between 30 and 50 percent
based on net income (IFRS). "Our strong free cash flow is expected to support a
sustainable dividend policy," emphasized CEO Thomas.
"In the mid-term, we are forecasting further growth in sales and adjusted
EBITDA," went on Thomas. "As the developer and manufacturer of components for
high-tech plastics, coatings, adhesives and sealants, we have a global
footprint. For decades, we have been supplying many thousands of customers in
the automotive, construction and electronics industries and in other key
Detailed information about the offering is contained in Covestro's stock market
prospectus, which was today approved by the German Financial Supervisory
Authority (BaFin). The document will be made available on the Covestro website
at www.covestro.com on the evening of September 18.