NÜRNBERG (dpa-AFX) - The shareholders of Nuremberg-based automotive supplier Leoni are threatened with a massive capital cut. Following a collapsed sale of a part of the company, the highly indebted cable and wiring system specialist urgently needs to raise fresh money. "The ongoing negotiations suggest that there will be no solution without a capital cut by shareholders," Leoni announced in Nuremberg on Friday. If the measures that are likely to be necessary are implemented, "the current shareholders would be diluted to the greatest possible extent with their existing stake." What is meant is that the shares would lose part of their value. The banks involved would also have to waive part of their claims, which had already fallen due at the end of the year.

Leoni's share price slumped by almost half on Friday. At times, the shares cost only 3.15 euros. Before the news became known in the early afternoon, the share price had still been more than 6 euros.

Leoni says it has net financial debt of around 1.5 billion euros. A large part of this would have fallen due at the end of the year. The proceeds from the sale of the profitable cable division should have been used for partial repayment. According to the plans, these would have flushed around 400 million euros into Leoni's coffers. Following the exit of the Thai investor in December, a moratorium was initially agreed with the financial backers.

Just a few days ago, Leoni announced that CEO Aldo Kamper would be leaving the company in March to head the lighting technology group AMS Osram. In January, the Leoni Supervisory Board had appointed restructuring expert Hans-Joachim Ziems to the board. Ziems had already bailed out Leoni in a difficult situation in 2020 and 2021.

At the time, the listed group of companies, which employs around 100,000 people in 28 countries and achieved consolidated sales of 5.1 billion euros in 2021, had received, among other things, a state guarantee of 330 million euros. When things seemed to be looking up again, the semiconductor crisis and the temporary closure of two plants for cable harnesses in Ukraine plagued the company.

The plan now apparently is for the banks to waive a substantial part of their claims and, with a capital cut, for shareholders to suffer losses at the same time. "The background to this is that all financial creditors will also have to make extensive concessions to enable Leoni AG to continue as a going concern in the long term," the company statement said. This is to be followed by a capital increase, in which Leoni hopes to raise fresh money from investors.

About three quarters of Leoni's shares are in free float. The largest single shareholder is the Austrian Pierer Group, with a stake of about 20 percent. "The latter has declared its willingness to make a significant restructuring contribution as part of the equity injection, subject to certain conditions," the Leoni release said./dm/DP/stw