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UPDATE 2-Wacker Chemie's Siltronic aims for IPO before summer
May 15, 2015 / 8:48 AM / 3 years ago

UPDATE 2-Wacker Chemie's Siltronic aims for IPO before summer

* Primary offer has size of 150 mln eur - Citi

* Wacker Chemie to hold majority in Siltronic post IPO

* To dispose of it in medium-term

* Wacker Chemie shares gain 1.5 percent after news (Recasts, adds context, comment from Siltronic CEO)

By Christoph Steitz and Eric Auchard

FRANKFURT, May 15 (Reuters) - Siltronic, the world’s third-largest maker of the silicon wafers used in semiconductor chips, aims to raise over 150 million euros ($170 million) by listing its shares in coming months, it said on Friday.

Siltronic, owned by German specialty chemicals maker Wacker Chemie, is seeking to capitalise on a modest rebound in its finances following years of steep declines.

It plans to issue new shares in a capital increase, while Wacker will separately sell existing shares in Germany and Luxembourg to private and institutional investors, although it will continue to hold a majority stake in Siltronic.

Elsewhere, shares will be offered for subscription by way of private placements, Siltronic said, adding that it would use proceeds from the listing, planned before the European summer break, to reduce its debt.

Shares in parent Wacker, which first announced plans for a possible IPO of Siltronic in March, rose on the news, gaining 1.5 percent by 1033 GMT.

The primary offer in Siltronic’s listing will amount to 150 million euros, while the level of the secondary offer as well as the greenshoe option still need to be determined, said Citi, one of the IPO’s bookrunners.

“We have worked hard over recent years to prepare Siltronic for independence,” Siltronic Chief Executive Christoph von Plotho said in a statement, referring to a total of 135 million euros in cost cuts over the past two years.

The Munich-based company has struggled for years, along with its bigger Japanese rivals Shin-Etsu Handotai and Sumco , with falling prices for silicon as personal computer markets have matured, limiting demand for microchips.

The worldwide silicon wafer market peaked at around $12.5 billion in 2007 but sales have plunged by more than a third since then, according to Gartner Inc. data, which has forced a wave of consolidation in the global industry, including plant closures at Siltronic.

Cost-cutting and growth in new automotive, consumer and industrial electronics markets has led revenue declines to begin to bottom out and profit margins to edge higher.

Siltronic’s sales slipped 2.6 percent last year to 853 million euros ($870 million) after declining 15 percent in the previous year. Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 4.4 percent to 118 million euros in 2014.

Siltronic, one of five units of Wacker Chemie, employs around 4,100 staff and operates four production sites in Europe, Asia and the United States.

Although Wacker Chemie expects to retain a majority stake in Siltronic in short term, it has said it plans to reduce its holding further in the medium term. ($1 = 0.8799 euros) (Editing by Thomas Atkins and Kevin Liffey)

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