Relevant Document:
KME Presentation
German-Italian semi-finished copper company KME has informed investors that it will reach a binding agreement for the
sale of a 55% stake in the Specials division to private equity group Paragon during the fourth quarter 2021, sources told Reorg.
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The group received a tax neutrality ruling for the transaction and now expects it can close the transaction in the first quarter 2022.
The group will generate net proceeds of €200 million out of the transaction after repayment of working capital facilities for around €60 million to €80 million and reinvestment of €32 million as a shareholder/vendor loan into the special division. However, the group did not provide details on how exactly these proceeds will be used. The agreement envisages the establishment of a company 55% owned by Paragon and 45% owned by KME.
As
reported, bondholders will not lose their security over the group’s Osnabrück facility, which is part of the Specials business, as the facility (land and building) will still be owned by KME.
Separately, the sale of the wires business to Elcowire group for €20 million of total proceeds is expected to close during the first quarter 2022.
KME also told investors that it has started conversations to extend the full amount of its €395 million borrowing base facility by one year with banks and hopes it will receive feedback or an extension by the end of the year, sources added.