PARIS (Sept. 28, 2010)—Michelin hopes to raise $1.62 billion in new capital, via a “preferential subscription rights” to existing shareholders, in order to finance growth, enhance its credit rating and reinforce its financial flexibility.
Michelin is offering each shareholder the opportunity to buy two new shares at $33.33 per share for every 11 shares already held. The preferential subscription right being offered applies to shares held as of the close of trading on Sept. 29, Michelin said. Shareholders will have until Oct. 13 to exercise the subscription offer.
During this period, the preferential subscription rights will be listed and traded on the regulated market of NYSE Euronext in Paris, Michelin said.
Michelin is making the offer available to shareholders in France, Germany, Italy, Poland, Romania, Spain and the United Kingdom.
The new shares will start trading on Oct. 25, Michelin said, and will carry dividend rights as of Jan. 1, 2010, meaning shareholders will be entitled to any dividends declared by the company from the date of issue.
Concerning the use of the funds, Michelin said it is increasing its capital spending to more than $2 billion annually.