May 13, 2020 / 8:47 AM / 17 days ago

Shares of sensor maker AMS dive after proposes capital hike for Osram takeover

VIENNA, May 13 (Reuters) - Shares in AMS fell 10% on Wednesday after the sensor maker said it planned another capital increase to finance the Osram takeover.

AMS, best known as a supplier for Apple’s face recognition technology on iPhones, is in the process of buying the leading manufacturer of car headlamps for up to $5 billion to open up new sales channels for its sensors in the auto industry.

To refund a 4.4 billion euro ($4.8 billion) bridge loan, provided by UBS, HSBC and Bank of America Merrill Lynch for the takeover, it already issued 190 million new shares with proceeds of 1.75 billion Swiss francs (1.7 billion euros).

The rights issue increased AMS’s capitalisation by more than 40%.

AMS is now seeking shareholder approval to issue convertible notes, profit participation bonds or profit participation rights that could translate into 27.4 million new shares, the invitation to its June 3 shareholders meeting said.

That would translate into only 390 million francs according to Tuesday’s closing price, but further dilute the shares.

AMS shares have lost nearly half their value this year amid investor worries about demand from Apple, its main customer, in the wake of the coronavirus pandemic, weak auto trends at Osram and high levels of debt. ($1 = 0.9223 euros) (1 euro = 1.0515 Swiss francs) (Reporting by Kirsti Knolle; Editing by Alison Williams)

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