ams Osram Unveils Refinancing Plan as Company Seeks to Strengthen Balance Sheet
PREMSTATTEN, Austria, Oct. 4, 2023 — ams OSRAM will deploy a multistage plan to strengthen its financial position and secure €2.25 billion ($2.36 billion) through the combination of a capital increase, corporate bonds, and other financing measures. The company aims to strengthen its balance sheet for structural growth by targeting what it calls investment-grade profile.
The news comes one week after ams OSRAM said it will receive more than €300 million from Germany’s Federal Ministry for Economic Affairs and Climate Action and the Free State of Bavaria to support investments in the R&D of innovative optoelectronic components at its Regensburg, Germany, location, which is home to ams OSRAM’s Osram Opto Semiconductors GmbH.
In July, the company also disclosed its plan to exit nonperforming businesses, announcing the elimination of its passive optical components portfolio and the reduction of its management board, effective Jan. 1, 2024.
The financing will include a proposed rights issue in the amount of €800 million, to be combined with an issuance of senior unsecured notes in euros and U.S. dollars, which are expected to raise a total of around €800 million. ams OSRAM also said it expects to execute asset transactions, such as sale and lease backs of corporate assets, to keep overall borrowing cost lower in a high-interest environment this winter. The total financing package is expected to be completed in 2024.
The financial strategy and associated efficiency program “re-establish the base” initiative that ams Osram unveiled this summer aim to align the group with a focused semiconductor portfolio and strengthen profitability with expected run-rate savings of around €150 million ($157 million) by the end of 2025. The company has since added that potential proceeds from a sale of the noncore semiconductor portfolio could also be used to reduce leverage.
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