SGL CARBON SE / Key word(s): Disposal
20.10.2016 08:48
Disclosure of an inside information according to Article 17 MAR,
transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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* Enterprise value of 350 million euros agreed - translating into cash
proceeds of at least 200 million euros
* Transaction expected to close in the first half of 2017
* In order to maximize proceeds, the cathodes, furnace linings, and carbon
electrode business (CFL/CE), which is also part of the business unit
Performance Products (PP), will be sold separately in 2017
* SGL Group evaluating the merits and viability of a potential near term
rights issue to further improve the capital structure and restore key
financial metrics to create a solid foundation for the growth businesses
CFM and GMS
Wiesbaden, October 20, 2016. Today, SGL Carbon SE signed the sale and
purchase agreement to sell its graphite electrode (GE) business to Showa
Denko (Japan). The two parties have agreed on an enterprise value (cash and
debt free) of 350 million euros, which, after deduction of standard
debt-like items (mainly pension and restructuring provisions) results in
cash proceeds of at least 200 million euros. The final proceeds will be
determined based on the balance sheets at closing. The transaction is
subject to customary closing conditions, relating in particular to
antitrust approvals. Closing is expected in the first half of 2017.
Showa Denko is one of Japan's leading chemical companies. In the fiscal
year 2015, Showa Denko generated sales of 781 billion yen (6.8 billion
euros) and an operating income of 34 billion yen (0.3 billion euros). The
company employed a workforce of 10,561 at the end of 2015.
Following the closing of the transaction, approximately 900 employees and
six production sites in Germany, Austria, Spain, USA, and Malaysia will be
transferred from SGL Group to their new owner.
The sale will result in impairment charges of 40-50 million euros in the
current fiscal year of SGL Group, which are related to transaction costs
and the continuation of the GE business until the closing date. The cash
proceeds equal the book value as of September 30, 2016. Thus, the
transaction does not trigger any write-downs on the book value in the GE
business.
To maximize proceeds, the CFL/CE business, which is also part of the
business unit PP, will be sold separately, with the sales process to be
continued in early 2017. Given the outcome of the GE sale, SGL Group is now
confident to achieve more than the book value of the former business unit
PP in the aggregated transactions.
SGL Group is convinced that the proceeds of the GE sale and the expected
proceeds of the CFL/CE sale will contribute to a significant reduction of
the Group's net debt position and thereby improve the balance sheet ratios.
In addition, the company is currently evaluating the merits and viability
of a potential near term rights issue utilising the existing authorized
capital framework to further improve the capital structure and restore key
financial metrics to create a solid foundation for its growth businesses
CFM and GMS.
Against the backdrop of the disposal procedures for the GE and the CFL/CE
businesses, the measures to adjust the administrative structures to a
smaller SGL Group following the entire PP disposal, and the related other
transitional matters in connection with the repositioning of the SGL Group
to focus on its growth businesses CFM and GMS, the company decided to
withdraw its guidance as provided in its report on the first half year 2016
with immediate effect, and to abstain for the time being from providing
any short term profit guidance during this transformation phase. SGL Group
plans to resume providing a new profit guidance around the time of the
publication of its 2016 annual report in March 2017.
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Information and Explanation of the Issuer to this News:
Important note:
This document contains statements relating to certain projections and
business trends that are forward-looking, including statements with respect
to SGL Group's outlook and business development, including developments in
SGL Group's Composites - Fibers & Materials and Graphite Materials &
Systems businesses, expected customer demand, expected industry trends and
expected trends in the business environment, statements with respect to the
sale of the graphite electrodes (GE) business and the expected sale of the
cathodes, furnace linings, and carbon electrodes (CFL/CE) businesses,
statements related to SGL Group's cost savings programs and statements with
respect to the intention to conduct a share capital increase. You can
generally identify these statements by the use of words like 'may', 'will',
'could', 'should', 'project', 'believe', 'anticipate', 'expect', 'plan',
'estimate', 'forecast', 'potential', 'intend', 'continue' and variations of
these words or comparable words. These statements are not historical facts,
but rather are based on current expectations, estimates, assumptions and
projections about SGL Group's businesses and future financial results, and
readers should not place undue reliance on them. Forward-looking statements
do not guarantee future performance and involve risks and uncertainties.
These risks and uncertainties include, without limitation, changes in
political, economic, legal and business conditions, particularly relating
to SGL Group's main customer industries, competitive products and pricing,
the ability to achieve sustained growth and profitability in SGL Group's
Composites - Fibers & Materials and Graphite Materials & Systems
businesses, the impact of any manufacturing efficiencies and capacity
constraints, widespread adoption of carbon fiber products and components in
key end-markets of the SGL Group, including the automotive and aviation
industries, the inability to execute additional cost savings or
restructuring measures, availability of raw materials and critical
manufacturing equipment, trade environment, changes in interest rates,
exchange rates, tax rates, and regulation, available cash and liquidity,
SGL Group's ability to refinance its indebtedness, development of the SGL
Group's pension obligations, share price fluctuation, the satisfaction of
the closing conditions for the disposition of the graphite electrodes (GE)
business, including obtaining relevant regulatory approvals, the
possibility that the length of time necessary to consummate the disposition
of the graphite electrodes (GE) business may be longer than anticipated,
the achievement of the expected benefits of the disposition of the graphite
electrodes (GE) business, the possibility that the SGL Group may suffer as
a result of uncertainty surrounding the disposition of the graphite
electrodes (GE) business, the anticipated effect of the disposition of the
graphite electrodes (GE) business may have on SGL Group's financial
condition and results of operations, the ability to sell the cathodes,
furnace linings, and carbon electrodes (CFL/CE) businesses at a price
satisfactory to SGL Group or at all and other risks identified in SGL
Group's financial reports. These forward-looking statements are made only
as of the date of this document. SGL Group does not undertake to update or
revise the forward-looking statements, whether as a result of new
information, future events or otherwise.
20.10.2016 The DGAP Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Archive at www.dgap.de
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Language: English
Company: SGL CARBON SE
Söhnleinstraße 8
65201 Wiesbaden
Germany
Phone: +49 (0)611 6029 - 0
Fax: +49 (0)611 6029 - 101
E-mail: investor-relations@sglgroup.com
Internet: www.sglgroup.de
ISIN: DE0007235301
WKN: 723530
Indices: SDAX
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover,
Munich, Stuttgart, Tradegate Exchange
End of Announcement DGAP News-Service
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DGAP-Adhoc: SGL CARBON SE: SGL Group signed agreement to sell its graphite electrode business to Showa Denko (SDK)
| Source: EQS Group AG