Varie
COFACE SA implements contingent equity line of up to EUR100M
Paris, 9 February 2016
COFACE SA (« COFACE ») implements today a 3-year contingent equity line (with a termination option after 2 years at the sole discretion of Coface) of EUR100 million with BNP Paribas Arbitrage, available in one tranche and exercisable upon occurrence of extreme events described below.
This contingent equity line is an efficient and cost-competitive solution (annual commission of 0.50%) to complete existing capital and solvency management tools. It contributes to prudent capital management in the framework of Solvency II's pillar 2 and protects the group from extreme risks by enhancing its financial strength.
For such purpose, COFACE and BNP Paribas Arbitrage have entered into a warrant issuance agreement ( ), pursuant to which COFACE will issue on 10 February 2016, 15,724,823 warrants to BNP Paribas Arbitrage.
The warrants issuance was decided by the CEO of COFACE on 9 February 2016, pursuant to the delegation granted by the company's Board of Directors on 15 December 2015 and on 9 February 2016, within the framework of the 12 and 13 resolutions of the General Meeting of Shareholders of COFACE held on 2 June 2014.
The maximum amount of the consecutive capital increase is EUR100 million (issuance premium included), an amount for which COFACE has received a firm commitment from BNP Paribas Arbitrage to subscribe for shares, in view of their private placement in accordance with the provisions of article 411-2 II of the French monetary and financial code.
The share issuance will be triggered automatically upon the occurrence of certain extreme events described below during the 3-year risk coverage period beginning on 1 January 2016 and ending 31 December 2018 (inclusive). The warrants will remain exercisable until 30 June 2019 at the latest.
In the absence of the occurrence of extreme trigger events, the estimated probability of occurrence of which is very low, no share will be issued under this programme, which would then reach its terms without having any dilutive effect on shareholders.
The operation will consist in the issuance by COFACE of 15,724,823 warrants ( ) to BNP Paribas Arbitrage. Each warrant will oblige BNP Paribas Arbitrage to subscribe to a new COFACE share in view of its private placement according to the terms of article 411-2 II of the French monetary and financial code.
Under this agreement, COFACE has committed to drawdown the line in case one of the events described below occurs and BNP Paribas Arbitrage has committed to exercise the number of warrants necessary to subscribe to new shares for a maximum amount of EUR100 million and within the limit of corporate authorisations . In accordance with the 13 resolution of the general meeting of shareholders dated 2 June 2014, the amount of the capital increase which could be carried out in accordance with the terms described herein shall not in any case exceed 10% of the share capital over the 12 months preceding the day on which the price of the share issuance is determined.
The line will only be exercisable if one of these events occurs: (i) the estimated ultimate net loss ratio of the COFACE group for the preceding financial year is superior or equal to 110% or (ii) the eligible capital of the COFACE group are below 105% of the Solvency Capital Requirement (SCR) (as these terms are defined by the regulatory framework of Solvency II).
The new shares, if any, will be subscribed by BNP Paribas Arbitrage at a price corresponding to 93% of the average of the volume-weighted average share prices for COFACE shares on Euronext Paris over the three trading days preceding the exercise of the warrants. In addition, COFACE and BNP Paribas Arbitrage have concluded a profit-sharing agreement which stipulates that 50% of the profit, if any, will be paid to COFACE. If the sale of the new shares occurs immediately after the exercise of warrants in an off-market transaction, the part of the profit due to COFACE will be paid by reducing the number of shares to be issued by COFACE upon exercise of the warrants, in order to limit the dilutive effect of the transaction for COFACE's shareholders. If the shares are not resold immediately, the part of the profit due to COFACE will be paid in cash.
Under current market conditions (i.e. an issuance price of EUR6.77 based on a 7% discount on an average of the volume-weighted average share price over 3 days of EUR7.28 per share), the maximum size of the operation in case of a drawdown of the line would represent 9.40% of COFACE's share capital .
Should the share price decrease by 10%, the maximum size of the operation in case of a drawdown of the line would represent 10% of COFACE's share capital based on an average of the volume weighted average share price over 3 days of EUR6.55 per share (that is to say an issuance price of EUR6.09 per share after application of a 7% discount).
BNP Paribas Arbitrage does not intend to become a long-term shareholder of COFACE and will do its best efforts to sell the shares as quickly as possible upon exercise of the warrants, through a private placement.
The implementation of this contingent equity line and the potential issuance of new shares in case of drawdown will not be subject to publication of a prospectus submitted to a visa of the French (AMF). COFACE will communicate relevant information to the market in compliance with applicable regulations at the time new shares are issued.
The potential dilutive effect of the contingent equity line arranged with BNP Paribas depends on the probability of occurrence of the extreme trigger events described above and on COFACE's share price at the time of their occurrence.
By way of illustration, the following table summarises the potential dilutive impact of the operation under different scenarios for a shareholder who holds 1% of the share capital prior to the operation (calculated on the basis of the number of shares comprised in the share capital as at 31 December 2015).
February 9 2016: publication of 2015 results
May 4 2016: publication of Q1-2016 results
May 19 2016: general shareholders' meeting
July 27 2016: publication of H1-2016 results
November 3 2016: publication of 9M-2016 results
This press release, as well as Coface SA's integral regulatory information, consolidated accounts and Q1 analyst presentation, can be found on the Group's website: http://www.coface.com/Investors
Copyright GlobeNewswire
Attachment(s)
http://hugin.info/161449/R/1984901/727813.pdf
This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: %s via Globenewswire