Rival Schmolz+Bickenbach shareholders agree to capital increase

Swiss Steel Holding AG

02/12/2019 17:50

ZURICH, Dec 2 (Reuters) - Rival Schmolz+Bickenbach  STLN.S 
shareholders agreed to terms of a rescue plan on Monday, helping
conclude a weeks-long power struggle over control of the
money-losing Swiss steelmaker.
    Liwet, the investment firm linked to Russian oligarch Viktor
Vekselberg that owns nearly 27% of Schmolz+Bickenbach, and
Martin Haefner, a Swiss billionaire with a 17.5% stake, reached
a pact over how to proceed with a capital increase of at least
325 million Swiss francs ($325.9 million), the company said.
    The agreement came as shareholders held an extraordinary
general meeting in Lucerne to consider how to inject more money
into the company that makes precision, acid- and heat-resistant
steel. 
    The two big shareholders agreed that Haefner's stake would
not exceed 37.5% following the capital increase, while Liwet
would have a 25% stake, Haefner's BigPoint Holding said.
    Schmolz+Bickenbach said it would provide more information on
the capital increase once Swiss financial markets supervisor
FINMA has published its decision on whether to suspend a rule
that would force a full takeover offer if a shareholder's stake
exceeds 33.3%. FINMA's decision is expected on Dec. 9.
    Liwet and BigPoint said they hoped FINMA would grant them an
exception to allow the capital increase.
    The Swiss Takeover Commission has already rejected granting
an exemption, but Liwet and BigPoint have appealed.
    Until Monday's pact, the two dominant shareholders were at
odds over a way forward, with Haefner, a car dealership owner,
warning the company faced imminent insolvency and Vekselberg's
Liwet accusing him of raising panic so he could take control on
the cheap.  urn:newsml:reuters.com:*:nL8N28B07I
    This marks 100-year-old Schmolz+Bickenbach's second
existential crisis since 2013, when Vekselberg joined its
founding German family to help rescue the company. 
    Its latest problems, Schmolz has said, have deepened as
trade conflicts and global political uncertainty led to a sharp
downturn in steel demand, including among key customers such as
the German car industry.  urn:newsml:reuters.com:*:nL5N278146
    Schmolz+Bickenbach, seen posting its fourth loss in five
years in 2019, is struggling under a growing debt pile -- net
debt totals 723 million euros ($797 million), or more than eight
times expected operating profit -- after buying troubled French
steelmaker Ascometal last year. 
    ($1 = 0.9073 euros)
    ($1 = 0.9972 Swiss francs)

 (Reporting by John Miller and Silke Koltrowitz. Editing by
Michael Shields)
 ((J.Miller@thomsonreuters.com; +41 58 306 7734; Reuters
Messaging: j.miller.thomsonreuters.com@reuters.net))