Osram comprehensive financing plan to include €800 million equivalent dollar, euro notes

By Paul A. Harris

Portland, Ore., Sept. 28 – In a Wednesday press release, Munich-based electric light and semiconductor company Osram Licht AG disclosed plans to sell €800 million equivalent of dollar- and euro-denominated senior notes.

The bond sale is expected in the late 2023 to early 2024 timeframe, the company stated.

HSBC, Morgan Stanley and UBS will be the underwriters for the deal, which is subject to approval at an extraordinary shareholders meeting scheduled for Oct. 20, 2023, and also subject to market conditions.

Details of the notes offering, as well as an €800 million rights offering, came in a company disclosure of a multi-stage comprehensive financing plan.

That plan also calls for an additional €350 million mix of debt instruments such as unsecured notes, bi-lateral debt facilities, or other instruments, subject to market conditions.

“The multi-element financing plan is designed to strengthen the balance sheet,” Osram chief financial officer Rainer Irle stated in a press release regarding the plan.

“Our comprehensive plan consists of new equity to reduce gross and net debt as well as new senior notes to refinance additional outstanding debt with a well-balanced maturity profile,” Irle said.

“We will also use additional financing instruments, such as sale & lease back transactions, with the aim of bringing the company on track to reach a healthy investment-grade leverage.”

A New York-based bond trader who focuses on distressed situations noted that the company’s stock fell as much as 25% upon the announcement of the financing plan.

The rights issue is “massively dilutive,” the trader remarked.

Given the timing of the plan and its announcement, the bond deal will likely come as soon as possible following the October extraordinary shareholders meeting, the source added.

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