Related News

Home » Business » IT

TomTom's fundraising plan sinks price of shares

SHARES in Dutch navigation device maker TomTom NV dropped more than 7 percent yesterday, reacting to the company's plan to raise 430 million euros (US$600 million) in a share issue to pay down part of its debt.

TomTom shares were down 7.5 percent at 6.93 euros in early trading, underperforming a 2 percent drop in Amsterdam's blue chip index AEX.

"The share issue should be enough for TomTom to get through the downturn," said asset manager Rob Koenders at Netherlands-based Harmony Vermogensbeheer.

TomTom said late on Sunday that the new shares are to be sold via a combination of a private placing and a rights issue. The sum raised amounts to nearly half of TomTom's market capitalization on Friday of 934 million euros.

Debt-laden TomTom said the offering would consist of a 359 million euro rights offering and a 71 million euro private placement with two investors - Cyrte Investments BV and Janivo Holding BV - who will pay 6.1234 euros per share.

Both will also participate in the rights issue along with the company's founders. The rest is underwritten by a banking consortium consisting of Royal Bank of Scotland, Rabobank, Goldman Sachs and Deutsche Bank.

The share issue will help cut debt to about 700 million euros from 1.16 billion at the end of the first quarter.

"We have evaluated a number of options over the last months. This was the right structure and also the right timing to do a rights issue," Chief Executive Harold Goddijn told reporters.

Details of the rights issue will be published after a shareholder meeting on June 30.

TomTom confirmed it had paid an amendment fee to change its debt covenants, but declined to disclose how much.



Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend