Power Machines is now moving ahead with its additional share issue. The deadline for accepting bids from the company's current shareholders entitled to the pre-emptive right to buy additional shares elapses on July 25. The order book in London will be closed on the same day. The company plans to sell the rest of its shares on LSE after the current shareholders have exercised their pre-emptive right.
The additional share issue will account for 20.67% of the current charter capital. The proceeds based on the market price as of July 24 will amount to $275 mln. According to the company's spokespersons, no more than 19.5% of additional shares will be placed on LSE and the rest will be bought up by the current shareholders. The core shareholders include UES with 25% + 1 share, Siemens with 25% + 1 share and Interros Holding with 30.4%. The additional share issue mainly targets financing the company's investment program.
Participation in buyout of the additional share issue of all the three core shareholders underscores that they have plans for the company's further development and that Power Machines shares hold upside potential. In addition, the company's placement on LSE will ensure compliance with tougher information disclosure requirements compared to those on the Russian stock market.
At present, we have no recommendation on Power Machines.
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