Ashurst advises Grammer as transaction counsel on innovative EUR 40m subscription rights capital increase
Ashurst advised its long-standing client Grammer AG (Grammer) as transaction counsel on the structuring and implementation of a capital increase with subscription rights. The capital increase was effected from the authorised capital of Grammer and generates gross issuing proceeds of EUR 40m. The company's main shareholder, Jiye Auto Parts GmbH, had irrevocably committed itself beforehand under a backstop agreement to exercising the statutory subscription rights to which it is entitled in connection with the capital increase with subscription rights and to acquire all new shares at the subscription price that were not subscribed for by the minority shareholders. With the implementation of this capital increase with subscription rights secured by the main shareholder, the company fulfils a requirement of the amendment agreement to the existing syndicated loan agreement concluded on 12 August 2020 between Grammer AG and the banking consortium with the participation of the Kreditanstalt für Wiederaufbau (KfW), through which it was expanded by a third tranche C amounting to EUR 235m.
The innovative structuring by Ashurst allowed the company, despite a capital increase volume of over 20%, to implement the transaction in a time and cost efficient manner as an offering exempt from the prospectus requirement. This was achieved by splitting the offered new shares into (i) a main shareholder tranche (prospectus exemption pursuant to Article 1 para. 4 (a) of the EU Prospectus Regulation), and (ii) a free float tranche, which was offered to the existing shareholders of the company, with the exception of the main shareholder, by way of indirect subscription rights in accordance with the subscription ratio at the subscription price (prospectus exemption pursuant to Section 3 para. 1 of the German Securities Prospectus Act in conjunction with Article 3 para. 2 (b) of the EU Prospectus Regulation).
The Ashurst team was led by partners Dr Gerrit Clasen and Matthias von Oppen (both Corporate/Capital Markets). They were assisted by associates Joanna Wilczynska-Gluch (Capital Markets) and Quynh Anh Le (Corporate, all Frankfurt).
Ashurst has been advising Grammer for many years, both in the context of transactions and on general corporate law matters as well as financings. The automotive supplier specialises in developing and manufacturing components and systems for car interiors as well as driver and passenger seats for off-road vehicles, trucks, buses, and trains.
