The Board of Directors convenes the Extraordinary Shareholders' Meeting of Carraro SpA for 27 June 2016

Capital increase on the agenda. The controlling shareholders confirm their commitment.

Campodarsego (Padua), 27 May 2016 – The Board of Directors of Carraro SpA, world leader in power transmission systems, chaired by Enrico Carraro, resolved to convene the Extraordinary Shareholders' Meeting of Carraro SpA to propose the previously announced capital increase, as well as amendments to the Articles of Association for the introduction of Category B shares (without voting rights). The new Extraordinary Shareholders' Meeting is convened for 27 June 2016 at 10:00 am.

"In line with that already announced at the end of last year, today the Board of Directors acknowledged the willingness of the controlling shareholders to proceed with the planned capital increase - said Enrico Carraro, Group Chairman - This is a major step forward in strengthening the Group's equity that will allow us to further strengthen our strategic position in the main target markets"._

Capital increase subscription rights (pursuant to Art. 2441 of the Italian Civil Code)
The capital increase will take place in accordance with that signed on 24 December 2015 in the debt restructuring agreement with the Group's lending banks, where Carraro SpA undertook to put in place a capital increase for the minimum amount of 34 million euros by 30 June 2016.

In the light of the foregoing, the Board of Directors has therefore convened the Shareholders' Meeting in order for the same to deliberate the capital increase for a maximum of 54 million euros in subscription rights, in tranches, and with immediate effect for any subscriptions which might be made before the launch of the rights, by issuing ordinary shares or B shares at the discretion of the subscriber, and deliberate that it shall be the Board of Directors which shall precisely determine the unit price of the new shares in accordance with the criteria described below.

The unit issue price of the newly issued shares shall be the higher of:
(i) the average share price of the six (6) months preceding the date of the Board of Directors' meeting approving convening of the Shareholders' Meeting to deliberate the Capital Increase; the latter value being determined as 1.457 euros per share; and
(ii) the average share price of the 6 (six) months prior to the last day of trading prior the date on which CONSOB grants clearance for the Prospectus.

Subscription of the capital increase is guaranteed for the amount of 34 million euros, as follows:
(i) the Shareholder Finaid S.p.A. has undertaken to subscribe to the capital increase for the amount of 14 million euros;
(ii) the Shareholder Julia Dora Koranyi Arduini (the Investor) has undertaken to subscribe to the capital increase for the amount of 20 million euros.

With respect to the above, the Board of Directors has received a letter from the majority shareholder Finaid SpA which was followed by a letter of full adhesion by the Investor, in which Finaid and the Investor, in order to enable the Company to meet the deadline provided for by the aforementioned debt restructuring agreement, expressed their willingness, under certain circumstances, to implement the agreements made in relation to the capital increase through a capital contribution, immediately after the Extraordinary Shareholders' Meeting called to deliberate the capital increase, even though the unit price of the newly issued shares will be determined at the latest on the date on which CONSOB grants clearance for the Prospectus.

The capital increase must be completed by 31 December 2016.

Moreover, the Board of Directors has proposed to the Shareholders' Meeting to amend the Articles of Association in order to take account of the Extraordinary Shareholders' Meeting resolution regarding approval of the Capital Increase.

Amendments to the Articles of Association: Introduction of Category B shares
Upon execution of the capital increase by the company, within the aforementioned deadlines, subscribers of the capital increase will receive ordinary shares or, but only on request, B Shares. Pursuant to the agreement, B shares shall be shares without voting rights in ordinary and extraordinary shareholders' meetings of the company. In any case, holders of B shares shall be entitled to all other administrative and equity rights pertaining to ordinary shares, as well as any other rights, provided for by law, in favour of holders of preference shares.

Convening of the Extraordinary Shareholders' Meeting In order to approve the capital increase, as well as the amendments to the Articles of Association, a new Extraordinary Shareholders' Meeting has been convened for 27 June 2016 at 10:00, in a single call.

Go to Press release 27.05.2016

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The Extraordinary Meeting of Shareholders approves the increase in share capital. The Articles of Association have been amended with the introduction of category B shares.

This is a major step forward in strengthening the Group's equity that will allow us to further strengthen strategic position in the main target markets.