Gigaset AG & Goldin Fund Pte. Ltd
September 2013. Gigaset AG resolved to increase its capital out of authorized capital and to issue convertible bonds. A backstop investor agreed to acquire all new shares and convertible bonds which remain unsubscribed after the exercise of the pre-emptive rights of existing shareholders subject to the condition that the backstop investor will obtain a minimum 30 % stake in Gigaset AG after such acquisition. Subject to the same condition, the investor will make substantial investment into a new business segment to be established at Gigaset.
The Executive Board of Gigaset AG has, with the approval of the Supervisory Board, passed a resolution to increase the capital of the Company out of authorized capital by up to 19,571,049.00 EUR (approximately 39% of the current share capital) against contributions in cash by issuing up to 19,571,049 bearer shares of common stock without par value (no-par shares). Existing shareholders enjoy their statutory pre-emptive rights. The new shares will carry full dividend rights as of January 1, 2013. The offer price for the new shares will be 1.00 EUR each and subscription ratio will be 23:9. The Company will not arrange for subscription rights trading.
The Executive Board of Gigaset AG has, with the approval of the Supervisory Board, passed a resolution to issue convertible bonds in the aggregate principal amount of 23,340,289.00 EUR. Existing shareholders maintain their statutory pre-emptive rights.
The aggregate principal amount is divided into 23,340,289 convertible bonds in bearer form with a principal amount of 1.00 EUR each, which rank pari passu among themselves. The convertible bonds can be converted into bearer shares of common stock without par value (but with an arithmetic pro rata value of 1.00 EUR). These shares bear rights to full dividends for the financial year in which they are issued.
The subscription price for the convertible bonds will be 1.00 EUR each and the subscription ratio is 15:7. The conversion period initially commences on 6 November 2013. The convertible bonds will mature on 23 March 2015 and bear interest of 3.00 % p. a. on their principal amount. At maturity, the convertible bonds will be subject to mandatory conversion into shares of the Company.
Both measures described above require the Company to publish a Securities Prospectus, which is currently undergoing review and approval by Federal Financial Supervisory Authority BaFin. The Executive Board expects the approved Securities Prospectus will be published on the Company’s web site on Friday 27 September 2013.
In connection with the resolutions above, Gigaset AG has entered into an Investor Agreement with Goldin Fund Pte. Ltd., a limited company incorporated in Singapore. This company is owned by the Hong Kong entrepreneur Mr. Pan Sutong, who holds a diversified portfolio of companies, including companies active in the consumer electronics business. Goldin Fund Pte. Ltd. intends to enter into a strategic cooperation with Gigaset group, to develop new market segments in consumer electronics which were previously not covered by Gigaset group.
Under the Investor Agreement, Goldin Fund Pte. Ltd. has irrevocably committed to Gigaset AG, equinet Bank AG and Bankhaus Neelmeyer AG to acquire all remaining new shares and convertible bonds not subscribed by shareholders of the Company at the respective subscription price. This obligation is subject to the condition precedent that Goldin Fund Pte. Ltd. – acquiring such shares and convertible bonds not subscribed for by the shareholders of the Company after the capital increase and on the assumption the convertible bonds are being converted – will hold a minimum of 30 % in the voting rights in the Company (“Shareholding Condition”).
Goldin Fund Pte. Ltd. has also undertaken to make an offer for the acquisition of all shares in the Company (takeover bid). In the case that the Shareholding Condition is not fulfilled, Goldin Fund Pte. Ltd. has the right to add minimum acceptance conditions to the takeover bid. According to the Investor Agreement, the price offered by Goldin Fund Pte. Ltd. during the takeover bid will be EUR 1.00 per Gigaset share.
In addition, the Investor Agreement provides rules pertaining to further capital measures of Gigaset group companies to finance the establishment of a new business unit for tablet computers, smartphones and other mobile communications devices (“New Business”).
Under these provisions, Goldin Fund Pte. Ltd. is, under certain circumstances (including the Shareholding Condition), obliged and entitled to participate in a capital increase which is to be resolved at a later stage, under exclusion of statutory pre-emptive rights of existing shareholders, and to acquire approximately 5.3 million new shares against payment of approximately EUR 5.3 million. The 5.3 million new shares will be composed of the remaining 262,286 shares from the Authorized Capital 2010 and of 5.1 million shares from the Authorized Capital 2013. In the case that the issue price for the new shares to be issued in this capital increase exceeds EUR 1.00. Goldin Fund Pte. Ltd. is not obliged to acquire these new shares.
In addition, subject to the Shareholding Condition Goldin Fund Pte. Ltd. shall also contribute an amount of EUR 30 million to a subsidiary of Gigaset AG, which is planned to run the New Business. In return, Goldin Fund Pte. Ltd. shall receive preference shares in this subsidiary.
Depending on the capital requirements of the subsidiary running the New Business, which will be jointly determined by Gigaset AG and Goldin Fund Pte. Ltd. at a later stage, Goldin Fund Pte. Ltd. has the right to contribute up to a further EUR 140 million to the subsidiary in return for receiving additional preference shares in this subsidiary.
It is the intention that Goldin Fund Pte. Ltd., at a later stage and subject to separate capital increase decisions which have to be made during a Shareholder’s Assembly of Gigaset AG, may contribute its preference shares to Gigaset AG in kind. The value of the preference shares to be contributed shall be, on the assumption that an impairment test on the contribution date is passed, the value of the contributions made by Goldin Fund Pte. Ltd. to the subsidiary as of the date of the contribution to the respective subsidiary. The issue price due for the new shares shall be EUR 1.00. The above plans – and thus the establishment of the New Business together – are also subject to the Shareholding Condition.
Due to the two capital measures adopted today and subject to the occurrence of the conditions described herein, Gigaset AG will receive a minimum of approximately EUR 15.4 million and a maximum of EUR 42.9 million.
The plans of the Company for the use of the proceeds is described in detail in the Securities Prospectus, which is currently undergoing review and approval by Federal Financial Supervisory Authority BaFin and will be published by the Company afterwards.
Gigaset was advised by Acxit Capital Management, which is now part of ACXIT Capital Partners.
About Gigaset AG
Gigaset AG, Munich, is an internationally operating company in the area of communications technology. The Company is Europe’s market leader in DECT telephones. Gigaset AG is listed on the Prime Standard of Deutsche Börse and so is subject to the very highest requirements for transparency. Its shares are traded on the Frankfurt Stock Exchange under the symbol ‘GGS’ (ISIN: DE0005156004). (www.gigaset.com)
About ACXIT Capital Partners
ACXIT Capital Partners is a leading international corporate finance and investment advisory firm for mid-market clients and entrepreneurs in Europe and beyond. Since 1998, we offer our clients comprehensive corporate finance advisory services including M&A and capital markets advisory as well as restructuring, debt and strategic advisory. As an independent, privately owned firm we maintain offices in Frankfurt, Berlin, Munich, Zurich, Vienna and Hong Kong as well as strong alliances in France, China, India and the USA.
To date, we have completed more than 350 transactions with a total deal/financing volume of approx. EUR 17bn. Our clients are corporations, family-owned businesses, entrepreneurs, financial sponsors and family offices. While our home market is in the German speaking region, most clients are international and transactions cross-border. (www.acxit.com)
ACXIT Capital Holding GmbH
60323 Frankfurt am Main
Dr. Ingmar Ackermann, Managing Partner