Key transaction terms:
- New issue with shareholders’ preferential subscription
rights
- Subscription price: €0.01 per new share
- Subscription ratio: 202 new shares for 1 existing
share
- Theoretical value of the preferential subscription rights:
€0.494
- Trading period for preferential subscription rights: from
November 2nd to November 10th, 2023 inclusive
- Subscription period: from November 6th to November 14th,
2023 inclusive
- Subscription commitment from Searchlight Capital Partners
for the total amount of the transaction
Regulatory News:
Latecoere Announces the Launch of the Share
Capital Increase Planned in Its Conciliation Protocol for an Amount
of Approximately €108.2 Million, Which May Be Extended to
Approximately €124.4 Million in the Event of the Exercise in Full
of the Extension Clause
Not to be published, distributed or circulated
directly or indirectly in the United States, Canada, Australia or
Japan.
This press release is an advertisement and not
a prospectus within the meaning of Regulation (EU) 2017/1129 of the
European Parliament and of the Council of June 14, 2017.
Latecoere (Paris:LAT) (the “Company”), a tier 1 provider
to major international aircraft manufacturers, announces today the
launch of a capital increase with preferential subscription rights
for an amount of approximately €108.2 million, which may be
extended to approximately €124.4 million in the event of exercise
in full of the extension clause (the “Capital
Increase”).
The Capital Increase is carried out in the context of the
conciliation protocol concluded between the Company and its
financial creditors on June 9th, 2023 and approved in connection
with a conciliation procedure by the Toulouse Commercial Court by
judgment dated June 16th, 2023 (the “Conciliation Protocol”)
aiming to provide Latecoere with a solid capital structure to
continue supporting its customers through the aircraft industry
ramp-up currently anticipated for 2023 and beyond.
The proceeds of the Capital Increase will be used, among other
things, to (i) repay, by way of compensation, the bridge loan
granted to the Company on May 15th, 2023 by the company SCP SKN
Holding I SAS for a total amount of approximately €47.3 million
including the issue premium amount and interests owed by the
Company in the context of the bridge loan granted on May 15th,
2023, and (ii) finance the reconfiguration of the industrial
footprint, started in 2022, notably in the United States (Gardena)
and in France (Montredon), in order to enable further concentration
of production in countries where costs are lowest and the
achievement of increased economies of scale. These measures will
improve the group's operating costs, allowing Latecoere to take
better advantage of the ongoing recovery in the aviation industry
and restore profitability over the coming years. This additional
equity (including €44.1 million already received under the bridge
loan), combined with the group's existing liquidity and other
initiatives (Sales & Lease Back), provides the financing
necessary to support the operational improvement program of
Latecoere, as well as to cover current loss-making operations.
The estimated gross proceeds of the capital increase are
approximately €108.2 million (which may be increased to
approximately €124.4 million if the Extension Clause is exercised
in full).
The estimated proceeds of the capital increase net of fees, are
approximately €107.2 million (which may be increased to
approximately €123.4 million if the Extension Clause is exercised
in full).
Main terms of the capital increase
The Capital Increase will be carried out with shareholders’
preferential subscription rights (the “Rights”), pursuant to
the 21st and 29th resolutions of the combined general meeting of
July 26th, 2023, leading to the issue of 10,820,137,070 new shares
(the “Initial New Shares”), which may be extended, in the
event of the exercise in full of the Extension Clause (as defined
hereafter), by 1,623,020,560 additional new shares (the
“Additional New Shares” and, together with the Initial New
Shares, the “New Shares”), at a subscription price of €0.01
per New Share. The subscription price corresponds to the nominal
value per share and will therefore not be subject to any issue
premium.
Each Company’s shareholders will receive one (1) Right for each
share recorded on his account at the end of the day on November
3rd, 2023. In order to allow the registration in securities
accounts on this date, purchases on the market of Existing Shares
must take place at the latest on November 1st, 2023. Each Right
will entitle its holders to subscribe for 202 New Shares on an
irreducible basis (à titre irréductible).
Subscriptions on a reducible basis (à titre réductible) will be
accepted. Any New Shares not subscribed by subscriptions on an
irreducible basis (à titre irréductible) will be distributed and
allocated to the holders of Rights having submitted subscription
orders on a reducible basis (à titre réductible) subject to
reduction in the event of oversubscription.
On the basis of the closing price of Latecoere share on the
regulated market of Euronext in Paris (“Euronext Paris”) on
October 27th 2023, i.e. €0.506, the theoretical value of one (1)
Right is €0.494 and the theoretical ex-right price of the share is
€0.012.
For information purposes, the issue price reflects a discount of
19.7 % compared to the theoretical value of Latecoere ex-right
share, calculated on the basis of the closing price on October
27th, 2023, and a discount of 98.0 % compared to the closing price
on October 27th, 2023.
These values do not necessarily reflect the value of the Rights
during their trading period, the ex-right price of Latecoere or the
discounts, as determined in the market.
The Capital Increase will be open to the public in France
only.
Extension clause
In accordance with the terms of the Conciliation Protocol, the
Company committed, depending on the demand, to increase the number
of Initial New Shares by a maximum of 15%, i.e. a maximum of
1,623,020,560 Additional New Shares. The Extension Clause may be
used only to serve subscriptions on a reducible basis, made by
shareholders and/or purchasers of preferential subscription rights,
which could not be served. The decision to exercise the Extension
Clause will be taken by the Company, after consultation with the
Global Coordinator and Bookrunner, at the latest on the date of
publication of the results of the Capital Increase scheduled for
November 17th, 2023 and will be mentioned in the press release
published by the Company and posted on the Company's website and in
the notice published by Euronext Paris S.A. announcing the results
of the Capital Increase.
Indicative timetable for the capital increase
The Rights will be detached on November 2nd, 2023 and tradeable
from November 2nd, 2023 until November 10th, 2023 inclusive on
Euronext Paris under the ISIN code FR001400LAB4. Unexercised Rights
will automatically lapse at the end of the subscription period,
i.e. on November 14th, 2023 at the close of trading. The
subscription period for the New Shares will be open from November
6th, 2023 until the close of trading on November 14th, 2023.
Settlement and delivery of the New Shares and commencement of
trading on Euronext Paris are expected to take place on November
21st, 2023. The New Shares will immediately entitle their holders
to receive dividends declared by Latecoere as from their date of
issuance. They will be immediately fungible with existing shares of
the Company and will be traded on the same trading line under the
same ISIN code FR001400JY13.
Subscription commitment
As of the date of the prospectus related to the Capital Increase
(the “Prospectus”), Searchlight Capital Partners (through
the company SCP SKN Holding I SAS), which owns 74.65% of the
Company’s share capital, has irrevocably committed to (i) exercise
all of its preferential subscription rights on an irreducible basis
and to subscribe Initial New Shares for a total amount of
€80,849,465.76, representing approximately 74.72% of the initial
amount (excluding the Extension Clause) of the Capital Increase on
the basis of a subscription price of €0.01 per New Share and (ii)
to subscribe on a reducible basis to 2,735,190,494 New Shares
representing the remainder of the amount of the Capital Increase
which would have not been subscribed on an irreducible basis, in
order to ensure the issue and subscription of all the Initial New
shares. The subscription amount will be paid up on an irreducible
basis (i) up to approximately €47.29 million by way of compensation
with the certain, liquid and payable debt due by the Company to SCP
SKN Holding I SAS under the bridge loan agreement concluded on May
15th, 2023 and (ii) up to approximately €33.56 million by way of
subscription in cash.
As of the date of the Prospectus, the Company is not aware of
any intention to subscribe from the Company’s shareholders or from
members of its administrative bodies other than those mentioned
above, with the exception of Mrs. Thierry Mootz and Greg Huttner
who have committed not to exercise or transfer, except to SCP SKN
Holding I SAS, their preferential subscription rights in the
context of the Capital Increase, in accordance with the terms of
the Conciliation Protocol.
Lock-up commitments
The Company has agreed to a lock-up period starting on the date
of the approval by the French Autorité des Marchés Financiers (the
“AMF”) of the Prospectus relating to the Capital Increase
and expiring 90 calendar days following the settlement-delivery
date of the New Shares, subject to certain usual exceptions.
SCP SKN Holding I SAS has agreed to a lock-up period expiring
180 calendar days following the settlement-delivery date of the New
Shares, subject to certain usual exceptions.
Dilution
For illustrative purposes only, a shareholder holding 1% of the
Company’s share capital as of October 30th, 2023, and not
subscribing to the Capital Increase, would hold 0.005% and 0.004%
on a non-diluted basis of the share capital following the issue of
the New Shares before and after full exercise of the Extension
Clause respectively.
Underwriting
The Capital Increase is not subject to an underwriting
agreement. In the context of the Capital Increase, a placement
agency agreement has been entered into by the Company and Société
Générale, acting as Global Coordinator and Bookrunner of the
Capital Increase.
Availability of the prospectus
The Prospectus approved by the AMF under number 23-453 on
October 30th, 2023 and comprised of (i) Latecoere 2022 universal
registration document filed with the AMF on June 23rd, 2023 under
number D.23-0514 (the “Universal Registration Document” or
“URD”), (ii) an amendment to the URD filed with the AMF on
October 30th, 2023 under number D.23-0514-A01 (the
“Amendment”), (iii) the securities note dated October 30th,
2023 (the “Securities Note”) and (iv) the summary of the
Prospectus (included in the Securities Note) is available on the
websites of the AMF (www.amf-france.org) and the Company
(www.latecoere.aero). Copies of the Prospectus are available free
of charge at the Company’s registered office (135, rue de Périole,
31500 Toulouse).
Potential investors are advised to read the Prospectus before
making an investment decision in order to fully understand the
potential risks and rewards associated with the decision to invest
in the New Shares. The approval of the Prospectus by the AMF should
not be understood as an endorsement of the offer or admission to
trading on Euronext of the New Shares.
Risk factors
Investors’ attention is drawn to the risk factors relating to
Latecoere included in chapter 2 “Internal Control and Risk Factors”
of the URD as updated in chapter 2 of the Amendment to the URD and
the risk factors relating to the transaction and the New Shares
mentioned in chapter 2 “Risk Factors” of the Securities Note.
Disclaimer
This press release does not constitute an offer to sell nor a
solicitation of an offer to buy, nor shall there be any sale of
ordinary shares in any State or jurisdiction in which such an
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such state or
jurisdiction.
The distribution of this document may, in certain jurisdictions,
be restricted by local legislations. Persons into whose possession
this document comes are required to inform themselves about and to
observe any such potential local restrictions.
This press release is an advertisement and not a prospectus
within the meaning of Regulation (EU) 2017/1129 of the European
Parliament and of the Council of 14 June 2017 (as amended, the
“Prospectus Regulation”). Potential investors are advised to
read the prospectus before making an investment decision in order
to fully understand the potential risks and rewards associated with
the decision to invest in the securities. The approval of the
prospectus by the AMF should not be understood as an endorsement of
the securities offered or admitted to trading on a regulated
market.
With respect to the member states of the European Economic Area
(others than France) and the United Kingdom (each a “Relevant
State”), no action has been undertaken or will be undertaken to
make an offer to the public of the securities referred to herein
requiring a publication of a prospectus in any Relevant State. As a
result, the securities may and will be offered in any Relevant
State only (i) to qualified investors within the meaning of the
Prospectus Regulation, for any investor in a Member State of the
European Economic Area, or Regulation (EU) 2017/1129 as part of
national law under the European Union (Withdrawal) Act 2018 (the
“UK Prospectus Regulation”), for any investor in the United
Kingdom, (ii) to fewer than 150 individuals or legal entities
(other than qualified investors as defined in the Prospectus
Regulation or the UK Prospectus Regulation, as the case may be), or
(iii) in accordance with the exemptions set forth in Article 1 (4)
of the Prospectus Regulation or under any other circumstances which
do not require the publication by Latecoere of a prospectus
pursuant to Article 3 of the Prospectus Regulation, of the UK
Prospectus Regulation and/or to applicable regulations of that
Relevant State.
The distribution of this press release has not been made, and
has not been approved, by an “authorised person” within the meaning
of Article 21(1) of the Financial Services and Markets Act 2000. As
a consequence, this press release is only being distributed to, and
is only directed at, persons in the United Kingdom that (i) are
“investment professionals” falling within Article 19(5) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order
2005 (as amended, the “Order”), (ii) are persons falling
within Article 49(2)(a) to (d) (“high net worth companies,
unincorporated associations, etc.”) of the Order, or (iii) are
persons to whom an invitation or inducement to engage in investment
activity (within the meaning of Article 21 of the Financial
Services and Markets Act 2000) in connection with the issue or sale
of any securities may otherwise lawfully be communicated or caused
to be communicated (all such persons together being referred to as
“Relevant Persons”). Any investment or investment activity
to which this document relates is available only to Relevant
Persons and will be engaged in only with Relevant Persons. Any
person who is not a Relevant Person should not act or rely on this
document or any of its contents.
This press release may not be published, distributed or
transmitted in the United States (including its territories and
dependencies). This press release does not constitute or form part
of any offer of securities for sale or any solicitation to purchase
or to subscribe for securities or any solicitation of sale of
securities in the United States. The securities referred to herein
have not been and will not be registered under the U.S. Securities
Act of 1933, as amended (the “Securities Act”) or the law of
any State or other jurisdiction of the United States, and may not
be offered or sold in the United States absent registration under
the Securities Act or pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act. Latecoere does not intend to register all or any
portion of the securities in the United States under the Securities
Act or to conduct a public offering of the securities in the United
States.
This announcement may not be published, forwarded or
distributed, directly or indirectly, in the United States, Canada,
Australia or Japan.
About Latecoere
As a Tier 1 partner to major industrial OEMs (Airbus, Boeing,
Bombardier, Dassault Aviation, Embraer, Lockheed Martin), Latecoere
serves the aerospace sector with innovative solutions for a
sustainable world. The Group operates in all segments of the
aerospace industry (commercial, regional, business, defense,
space), in two business areas:
- Aerostructures (55 % of sales as of December 31, 2022): doors,
fuselage, wings and empennage, connecting rods and customer
service;
- Interconnection systems (45 % of sales as of December 31,
2022): wiring, avionics furniture, on-board equipment, electronic
products and customer service.
At December 31, 2022, the Group employed 5 918 people in 14
countries. Latecoere is listed on Euronext Paris - Compartment B,
ISIN Code: FR001400JY13 - Reuters: AEP.PA - Bloomberg: AT.FP
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231031524849/en/
Thierry Mahé / Media Relations +33 (0)6 60 69 63 85
LatecoereGroupCommunication@latecoere.aero
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