Lenzing Owner May Sell $631 Million Stake to Boost Investors

Lenzing AG (LNZ)’s main owner may sell a 20 percent stake valued at 453 million euros ($631 million) as part of the Austrian viscose-fiber maker’s planned offer of equity in the second quarter to broaden its investor base.

B&C Industrieholding GmbH, with 90.5 percent of Lenzing, may sell the stake under a proposal to increase the free float, or shares available to trade on the secondary market, to about 30 percent, B&C Chief Executive Officer Michael Junghans said.

“Lenzing needs broader access to the capital markets and this is supported by higher visibility,” Junghans said by phone from Vienna. “A free float of about 30 percent would support Lenzing in this sense and this means that, depending on the share price, B&C could sell about 20 percent.”

The producer plans to offer new shares from a 75 million- euro capital increase in the second quarter to private investors in Austria and international institutions, while B&C would sell an unspecified stake, Lenzing said in a statement yesterday. The company had a market value of about 2.26 billion euros today.

The planned offer of stock may go ahead early in the quarter should market conditions allow, Junghans said.

Lenzing planned to sell about 500 million euros of shares by late April in a public offering of new and outstanding stock, two people with knowledge of the sale said last month. Such a sale would raise its free float to more than 700 million euros, qualifying the company for membership on the local bourse’s main ATX index, a goal identified by Chief Executive Officer Peter Untersperger in a Jan. 13 interview with Die Presse newspaper.

Fund Expansion

The sale will also help fund a 1.5 billion-euro investment to build plants and expand facilities in Austria, China, India and Indonesia over the next four years, said the people, who declined to be identified because the matter is confidential.

B&C and Lenzing have hired Morgan Stanley as sole global coordinator for the transaction. Morgan Stanley, Deutsche Bank and UniCredit will be the joint bookrunners.

Lenzing, based in the Upper Austrian town of the same name, is seeking to increase capacity as rising cotton prices boost demand for substitute fibers. It competes with India’s Grasim Industries Ltd. (GRASIM) and Aditya Birla Nuvo Ltd. (ABNL), Hong Kong-listed Sateri Holdings Ltd. (1768), and Thai Rayon Pcl. (TR)

The company, founded in Nazi-occupied Austria in 1938, was taken over by a group of Austrian banks after World War II. In 2000, the principal owner, a precursor to UniCredit Bank Austria AG, endowed its industrial holdings to a charity, whose investment vehicle B&C also owns stakes in Austrian rubber maker Semperit AG and builder Allgemeine Baugesellschaft Porr AG. (POS)

To contact the reporter on this story: Boris Groendahl in Vienna at bgroendahl@bloomberg.net

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net

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