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    8TRA   DE000TRAT0N7

TRATON SE

(8TRA)
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Volkswagen's Traton explores potential capital increase -sources

06/11/2021 | 12:47pm EDT
FILE PHOTO: The logo of Volkswagen's truck unit Traton, former Volkswagen Truck & Bus AG, is pictured in Hanover

FRANKFURT (Reuters) - German trucks maker Traton is in the early stages of exploring a capital increase worth more than 1 billion euros ($1.2 billion) as its takeover of U.S. peer Navistar draws to a close, three people close to the matter said.

Traton, which has a market capitalisation of about 13.7 billion euros, is contemplating raising its capital by about 10% in a deal that could happen as soon as after the summer break, the people said.

The company, in which Volkswagen owns a 89.72% stake, in November agreed to pay $3.7 billion to buy the outstanding shares of Navistar to extend its reach in North America. The deal is expected to close early in the third quarter.

Traton financed the deal with debt, mainly relying on a loan it received from Volkswagen. It said at the time it wants to retain its investment grade rating following the transaction and would not rule out any refinancing instruments.

Jefferies analysts last month wrote that Traton sees the "100% debt funded Navistar acquisition as suboptimal given risk to the credit rating, suggesting a potential 1.2-1.4 billion euros of equity raise as optimal".

Volkswagen would be unlikely to agree to a capital increase below the 27 euro issue price for Traton shares at its 2019 initial public offering as that would dilute the carmaker in an unacceptable way, one of the people said.

Traton and Volkswagen both declined to comment.

Traton, which owns the MAN and Scania brands, has the option of issuing up to 200 million additional shares on or before May 21, 2024, which would represent an increase of up to 40%.

Traton's shares have risen by more than a fifth year-to-date and closed at 27.36 euros on Friday, as demand for trucks has recovered from the trough caused by the coronavirus pandemic.

Navistar earlier this week beat analysts' expectations with it quarterly earnings, posting a net income of $1.63 per diluted share, on revenues of $2.2 billion.

Navistar also holds a small stake in self-driving truck startup TuSimple, which listed in spring and which has seen its valuation jump to 10 billion euros since.

($1 = 0.8214 euros)

(Editing by Kirsten Donovan)

By Arno Schuetze, Christoph Steitz and Christina Amann


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
TRATON SE 0.00% 26.6 Delayed Quote.17.67%
TUSIMPLE HOLDINGS INC. 8.67% 55.39 Delayed Quote.0.00%
VOLKSWAGEN AG -2.44% 217.95 Delayed Quote.46.57%
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Sales 2021 26 555 M 31 717 M 31 717 M
Net income 2021 1 090 M 1 302 M 1 302 M
Net Debt 2021 10 240 M 12 231 M 12 231 M
P/E ratio 2021 15,3x
Yield 2021 2,34%
Capitalization 13 300 M 15 886 M 15 886 M
EV / Sales 2021 0,89x
EV / Sales 2022 0,82x
Nbr of Employees -
Free-Float 10,3%
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Number of Analysts 11
Last Close Price 26,60 €
Average target price 28,65 €
Spread / Average Target 7,72%
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Matthias Grundler Chairman-Management Board & CEO
Christian Schulz Chief Financial Officer & Member-Management Board
Hans Dieter P÷tsch Chairman-Supervisory Board
Christian Levin COO & Member-Management Board
Athanasios Stimoniaris Vice Chairman-Supervisory Board
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