September 4, 2015 / 6:27 AM / 2 years ago

Bayer says to launch Covestro IPO with new shares only

FRANKFURT, Sept 4 (Reuters) - Bayer’s Covestro, Europe’s fourth-largest chemicals maker, will launch an intital public offering of new shares in the fourth quarter, Bayer said on Friday.

“The offering will consist solely of new shares issued by Covestro by way of a capital increase,” Bayer said in a statement.

Plastics specialist Covestro plans to use the proceeds from the IPO primarily to repay debt to Bayer.

With net debt including pension liabilities at 2.5-3.0 times adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for 2015, Covestro is seeking an investment-grade credit rating, according to the statement.

The first day of trading typically follows about four weeks after a company’s so-called “intention to float” notification.

Reporting by Ludwig Burger

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