November 25, 2019 / 8:42 AM / 21 days ago

Steelmaker Schmolz+Bickenbach says survival at risk after takeover board ruling

ZURICH, Nov 25 (Reuters) - Swiss steelmaker Schmolz+Bickenbach said its survival was on the line after the country’s Takeover Board rejected a request from its two largest shareholders which could make their participation in a capital hike less likely.

Liwet Holding is controlled by Russian oligarch Viktor Vekselberg and BigPoint Holding is the vehicle of Swiss billionaire Martin Haefner.

They are among the shareholders being asked to provide up to 614.25 million Swiss francs ($616 million) to Schmolz+Bickenbach which needs the cash injection to pay down debts after struggling with losses and collapsing demand for steel this year.

Liwet and BigPoint have asked to be exempted from being obliged to make an offer for the entire business if they increase their holdings, a request which the Swiss Takeover Board denied.

Under Swiss rules, a shareholder must make an offer when their holding exceeds 33.33% of the voting rights. BigPoint wants 37.5% of Schmolz+Bickenbach, up from 17.5% at present, while Liwet controls a 27% stake.

Schmolz+Bickenbach described Swiss Takeover Board’s decision as “blatantly wrong,” saying without the capital increase the company faced a considerably increased risk of collapse.

“Without such exceptions, the major shareholders will not participate in the capital increase or will not do so to a sufficient extent,” the company said.

“Based on the facts, Schmolz + Bickenbach is convinced that the requests of Martin Haefner/BigPoint Holding AG and Liwet Holding AG must be approved in order to ensure the continued existence of the company,” it said.

The company has filed an appeal with the Swiss financial supervisor FINMA and called on its shareholders to support its complaint.

Without a capital increase small shareholders will lose all their investments and more than 10,000 jobs would be lost worldwide, 800 of them in Switzerland, it said.

A extraordinary shareholders meeting is to take place on Dec. 2 to decide the outcome of the fundraising.

$1 = 0.9972 Swiss francs Reporting by John Revill; editing by Jason Neely

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