Repower AG is planning a rights issue to increase its capital by at least CHF 150 million.
In doing so it is reinforcing its shareholder structure with the addition of two new, prestigious investors with a long-term horizon.
Elektrizitätswerke des Kantons Zürich (EKZ) and UBS Clean Energy Infrastructure Switzerland KGK (UBS-CEIS) have undertaken to invest CHF 150 million (CHF 90 million and CHF 60 million respectively) in the planned rights issue.
The existing shareholders Canton Graubünden and Axpo Holding AG will continue to hold their substantial interests in Repower.
Canton Graubünden thus retains its role as an important shareholder, and Repower will retain its firm roots in Canton Graubünden and continue to be an attractive employer in the region.
Repower is thus creating a basis for executing its strategic realignment.
Shareholders will vote on motions to conduct the planned rights issue to increase capital, elect new members to the Board of Directors and make individual amendments to the articles of association in an extraordinary general meeting to be held on 21 June 2016.
In a move designed to harmonise and simplify its capital structure, as of 29 April 2016 Repower had its equities delisted from the SIX Swiss Exchange, and following the corresponding resolution of the annual general meeting on 12 May 2016 converted its former bearer shares and participation certificates into standard registered shares.
Repower’s Board of Directors is now planning to make an authorised increase in the company’s capital with the aim of consolidating the capital base, reducing net debt and implementing the measures involved in strategically realigning the organisation as an energy services business. The board is moving that at an extraordinary general meeting to be held on 21 June 2016 the company’s shareholders increase the share capital from CHF 3,408,115 to a maximum of CHF 8,179,476 by issuing up to 4,771,361 new registered shares with a nominal value of CHF 1 each at a subscription price of CHF 43 per new share. The subscription price corresponds to the volume-weighted average market price over the last 20 days. The subscription rights of the shareholders will be observed. Existing shareholders will be able to acquire seven new shares for every five shares they already hold.
The main shareholders Canton Graubünden and Axpo Holding AG have undertaken not to exercise their subscription rights. In their place two new investors with a long-term horizon, Elektrizitätswerke des Kantons Zürich (EKZ) and UBS Clean Energy Infrastructure Switzerland KGK (UBS-CEIS), a Swiss energy infrastructure company for pension funds and insurance companies that is advised by Fontavis AG, undertake to exercise the rights allotted to them to subscribe to new shares for a total of CHF 90 million and CHF 60 million respectively.
Subject to the approval of the extraordinary general meeting, the planned increase in capital is likely to take place at the beginning of July 2016. The lead manager for the transaction will be Zürcher Kantonalbank.
Repower creates basis for implementing strategic realignment
The planned increase in capital will create the foundation to successfully implement the strategic realignment announced in December 2015 to restructure Repower as an energy services company. The key elements of the strategy are:
Maintaining Repower’s own hydropower assets and interests in other hydropower generation assets
Shifting the company’s own power generation to 100% renewables (divesting all nuclear interests and the Teverola plant), and as far as possible harnessing subsidies to augment rentability of generation assets
Concentrating on the Swiss (including international trading and origination business) and Italian markets
Developing the service business for energy utilities and power plant operators
Expanding sales in Switzerland (partner strategy) and Italy
Developing solutions for smart systems and grids within the framework of available resources.
This will reduce Repower’s dependence on the absolute price of electricity and enable the company to develop new fields of business.
Canton Graubünden retains its role as an important shareholder, as does Axpo. Repower will continue to operate as an energy company with a decentralised set-up firmly rooted in Graubünden and will remain an attractive employer in the region. It does not intend to withdraw from any of its sites.
Repower strengthens ownership structure with the addition of two new long-term anchor investors
The planned increase in capital will broaden and strengthen Repower’s shareholder structure. The two new investors view Repower’s involvement in hydropower, its position in the Swiss and Italian markets, the realignment of the business that it has initiated and the expiry of long-term agreements as a good starting point for positive development.
“We are convinced that hydropower will become profitable again in the longer term, and want to broaden the scope of our value creation. Repower has an excellent position in hydropower and with its planned realignment is pursuing the right strategy. As partners we can set common areas of focus and help actively shape the major changes sweeping the world of energy,” says Dr Urs Rengel, CEO of EKZ.
UBS Clean Energy Infrastructure Switzerland sees its interest as an investment in a leading Swiss energy provider with a large portfolio of hydropower assets. “For our investors this interest is a long-term investment in Swiss hydropower. Together with our partners Axpo, EKZ and Canton Graubünden we are supporting Repower’s strategic realignment,” says Roland Leuenberger, member of the board of directors of UBS-CEIS and partner in its investment advisor Fontavis.
The planned increase in capital, the implementation of the ongoing strategic realignment and the expiration of long-term agreements that are unfavourable to Repower in the current environment should enable the company to increase its financial room for manoeuvre, gradually improve its earnings situation, and develop new areas of business. CEO Kurt Bobst: “With two prestigious, long-term investors taking substantial interests in the company, we feel encouraged and strengthened in our strategic realignment. The increase in capital will enable Repower to maintain its presence as a strong partner amid the fundamental changes taking place in the energy markets.”
Axpo CEO Andrew Walo: “Axpo has always welcomed Repower’s efforts to expand its shareholder base. The plan to increase the capital with new partners on board will facilitate Repower’s strategy in the long term and make the company stronger.”
Canton Graubünden interested in long-term stability
Canton Graubünden supports the planned increase in capital as a means of safeguarding the long-term existence of an energy company that is important to the canton. “The canton is convinced that the two new anchor investors are the optimum addition to Repower’s shareholders and that they will make the company stronger. They support the company’s long-term objectives, which are also what underlies the canton’s interest in Repower. This sends out a clear signal in terms of hydropower in Graubünden,” says Government Councillor Dr Mario Cavigelli, Head of the Canton Graubünden Department of Construction, Transport and Forestry.
Extraordinary general meeting on 21 June 2016
The Board of Directors moves that at an extraordinary general meeting (EGM) convened for 21 June 2016 the shareholders approve the planned rights issue to increase capital and a newly structured Board of Directors reflecting the new shareholder structure and the strategic realignment. In future the Board of Directors is to be limited to seven members. Dr Eduard Rikli (Chairman), Dr Manfred Thumann, Dr Rudolf Huber, Placi Berther and Gerhard Jochum will not be standing for re-election. Dr Martin Schmid (current member), Claudio Lardi (current member), Rolf W. Mathis (current member), Dr Urs Rengel, Roland Leuenberger and Peter Eugster will be proposed for election at the EGM on 21 June 2016. The process to appoint a chairman has been initiated.
The invitation to the EGM will follow within the relevant deadline in the next few days.
At 9.15am on Monday, 30 May 2016, Repower will be holding a telephone conference for media representatives, analysts and investors. Invitations to this will be sent out separately.
At 11.30am on the same day, Repower will be holding a meeting for representatives of the media in the Southeast Switzerland region. Invitations to this event will likewise be sent out separately.
T +41 81 839 7111
M +41 79 221 4655
T +41 81 839 7111
M +41 78 774 1419
Head of Media Relations
T +41 81 839 7111
M +41 79 831 5213
Dr Mario Cavigelli
Head of Department of Construction, Transport and Forestry
T +41 81 257 3601
Head of Media Relations
T 0800 441 100
Head of Corporate Communications
T +41 58 359 5299
UBS Clean Energy Infrastructure Switzerland:
T +41 44 234 8500
T +41 41 545 4100
About Repower Group
Repower is an international energy company headquartered in Brusio (Canton Graubünden, Switzerland). Its key markets are Switzerland and Italy. The group operates along the entire electricity value chain from generation and trading to sales and distribution. In addition it is involved in the gas business in a number of European markets. Repower also develops innovative solutions facilitating the smart integration of energy systems, as well as providing services to other energy utilities. The Repower Group employs some 635 people, plus around 30 apprentices in Switzerland and approximately 450 sales consultants in Italy. www.repower.com
About Elektrizitätswerke des Kantons Zürich (EKZ)
EKZ is one of the largest energy utilities in Switzerland, supplying around a million people with low-cost, safe and environmentally-friendly electricity. With a distribution grid comprising more than 14,000 kilometres of high-quality lines, EKZ’s customers enjoy a highly reliable supply of electricity. EKZ also gears its energy products, additional services and service processes systematically to the needs of its customers. By providing smart solutions ranging from grids and electric installations to renewable energy, the company is helping shape the future of energy − all with the aim of making the world of energy easier for its customers. EKZ employs around 1,400 people, including 153 apprentices. www.ekz.ch
About UBS Clean Energy Infrastructure Switzerland
UBS Clean Energy Infrastructure Switzerland, a limited partnership for collective capital investments, is a collective investment solution for institutional investors in Switzerland. It is advised by Fontavis AG. 36 Swiss pension funds and insurance companies have contributed capital of around CHF 400 million to UBS Clean Energy Infrastructure Switzerland since its launch in January 2013. It invests in companies and assets that generate renewable energy, provide infrastructure and improve energy efficiency. So far the portfolio of equity interests and financings comprises 11 Swiss companies. www.ubs.com/ceis
About Fontavis AG
Fontavis is an independent investment advisor and asset manager specialising in investments in clean energy and infrastructure, primarily in Switzerland. Fontavis invests on behalf of pension funds, insurance companies, funds and other institutional investors in companies and assets that generate renewable energy, provide energy infrastructure or improve energy efficiency. In its capacity as investment advisor to UBS-CEIS, Switzerland’s first renewable energy and infrastructure fund, Fontavis is responsible for finding, examining and managing the investments held by UBS-CEIS. www.fontavis.ch
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