Encavis shareholders against dilution due to mandatory conversion of bonds

Dhe shareholders of the solar and wind farm operator Encavis have to be prepared for a significant dilution of their stake. The company announced over the weekend that the hybrid convertible bonds issued in 2017 and 2019 will be converted early. As last announced on May 31 of this year, the conversion price is EUR 7.0836. The total volume of the outstanding bonds is said to be 149.5 million euros. From this and from the information provided by the company on its website about the number of papers currently outstanding, the number of shares increased by a good 15 percent.

The shares listed in the M-Dax lost more than 3 percent to around 15 euros on Monday. The paper thus recorded the largest daily losses in the small cap index, which itself rose 0.4 percent to 36,257 points. The company’s market capitalization is around 2 billion euros.

Encavis justified the move with the fact that, according to her assessment, a large part of the bonds would have been converted after the upcoming interest payment date on September 13th. The early mandatory conversion in one transaction instead of several individual conversions simplifies and increases the efficiency of the conversion process considerably. The company intended to create the required shares from the Conditional Capital 2017 and 2018 as well as from the Authorized Capital 2021. The date for the early mandatory conversion is October 4th.

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