DGAP-Adhoc SGT German Private Equity GmbH & Co. KGaA: SGT German Private Equity - Elimination of the convertible bond of 257 million EUR resolved in connection with the merger, for the benefit of its shareholders
DGAP-Ad-hoc: SGT German Private Equity GmbH & Co. KGaA / Key word(s): Change in Forecast/Mergers & Acquisitions
+++ Ad-hoc announcement +++
SGT German Private Equity - Elimination of the convertible bond of 257 million
EUR resolved in connection with the merger, for the benefit of its shareholders
- Elimination of the issuance of the convertible bond of 257 million EUR and the imminent dilution of up to 103 million shares, without replacement
- Retrospective, fundamental improvement of the conditions of the ongoing merger
- Many times higher upside opportunity for its shareholders
Frankfurt/Main, 27 October 2020 - Today, the SGT German Private Equity, a listed private equity asset manager, has agreed with the shareholders of the merger partner SGT Capital Pte. Ltd., SGT Capital LLC, retrospectively to their merger resolved at the Annual General Meeting on 7 August 2020 that the convertible bond of 257.46 million EUR, that was resolved as a compensation for the contribution in kind, will not be issued, but cancelled without replacement. This relieves the liabilities' side of the future balance sheet of the merged company substantially and eliminates the imminent dilution of the existing shareholders of up to 103 million shares.
The reason for the concession of the elimination of the planned issuance of the convertible bond is a surprisingly asymmetrical accounting effect under IFRS, being opposed to advise previously obtained, which would have caused significant book losses upon each fund raising achievement for the launched private equity fund beyond the base case scenario of 1 billion USD fund volume, hence would have repeatedly hit the profit and loss statement strongly.