Dutch telco KPN’s board of directors has approved the company’s planned rights issue of up to €3bn.
The rights issue is expected to take place after the publication of KPN’s Q1 2013 results, scheduled for 23 April, the company said in a…
Dutch telco KPN’s board of directors has approved the company’s planned rights issue of up to €3bn.
The rights issue is expected to take place after the publication of KPN’s Q1 2013 results, scheduled for 23 April, the company said in a statement.
KPN intends to release further details on the rights issue, which major shareholder America Movil (AMX) has agreed to support – including the number and pricing of included shares – at the time of the launch.
The rights issue forms part of a capital raise first announced by the company in February. The raise also included hybrid bond issues worth a total €2bn, completed in late March. KPN expects credit rating agencies to consider 50% of the hybrid bonds as equity.
In its statement today, KPN reiterated that the proceeds of the capital raise will improve its “financial and strategic flexibility” and enable it to reduce debt and invest in operations.
Bernstein Research analysts said in a note to investors that they expect KPN to complete a “highly dilutive” rights issue after the Q1 results, adding that “this fresh capital injection will help preserve the current capital invested in the business”.
The analysts said that, with about 1.43 billion shares in issue, they expect KPN to announce a 1:1 rights issue, priced at about €2.10 per share in order to raise the target €3bn.
KPN has a market capitalisation of €4.04bn. At the time of writing, its shares were trading €2.82 each, up from €2.81 at close of trade yesterday.
The Amsterdam-based telco has also announced the board of directors has approved a number of changes to the supervisory board. These include the promised appointments of AMX CFO Garcia Moreno Elizondo and COO Oscar von Hauske.
KPN and its Mexico-based shareholder signed a “relationship agreement” in February, under which AMX gained two seats on the telco’s supervisory board in exchange for agreeing to support the rights issue.
