Stark Corporation Public Company Limited (SET:STARK) signed an agreement to acquire Business Group Automotive Cable Solutions of LEONI AG (XTRA:LEO) on May 23, 2022. The transaction has an enterprise value of €560 million. Stark Corporation is will be required to pay 3% of the purchase price that is €16.8 million if breaches the agreement.

In 2021, the Business Group Automotive Cable Solutions generated sales of €1.3 billion, net profit of €63 million, had total assets of approximately €740 million and total equities of approximately €290 million. The completion of the sale is still subject to various closing conditions, including required merger control and investment control clearances, which are expected to be granted within six months. The closing of the transaction is also subject to the approval of LEONI Group‘s financing partners.

The Board of Directors and the Supervisory Board of Leoni AG as well as the Board of Stark Corporation have already approved the transaction. The Company anticipates to complete the Proposed Transaction by November 30, 2022. Net proceeds from the sale of Business Group Automotive Cable Solutions (BG AM) are to be used up to a total amount of €442 million to repay financial liabilities of the Leoni Group.

As of September 23, 2022, the transaction has been approved by the shareholders of Stark Corporation. As of December 13, 2022, LEONI reported that Stark Corporation refused to perform the closing of transaction despite the fulfilment of all the conditions. Stark Corporation demanded very significant amendments to the purchase agreement.

The syndicate banks have already declared (subject to customary approval processes) that they will temporarily extend the credit facilities maturing on December 31, 2022. Leoni will enter into discussions with the syndicate banks on suitable amendments to the refinancing plan. Credit Suisse Securities (Thailand) Limited and Avantgarde Capital Company Limited acted as the Financial Advisor to Stark Corporation.

EY Corporate Services Limited, Advisory Arm acted as financial advisor to Stark Corporation Public Company Limited (SET:STARK) in the transaction.