Rheinmetall Sticks to Plan for IPO of Car-Components Unit

Rheinmetall AG (RHM), the maker of KS Kolbenschmidt engine pistons and a partner in Germany’s Puma battle tank, said it remains committed to selling shares in its Kolbenschmidt Pierburg car-components unit.

Any initial public offering for the division will depend on how stock markets are performing, Chief Executive Officer Klaus Eberhardt said today at a press conference at Rheinmetall’s headquarters in Dusseldorf, Germany. The manufacturer will keep a stake in the unit, while it has yet to decide whether to retain a majority holding, he said.

“It’s not about finding one interested party if an IPO is to happen, it’s about finding a handful of institutional investors through the international financial markets,” Eberhardt said.

Rheinmetall postponed plans for Kolbenschmidt Pierburg’s IPO in November as the European sovereign-debt crisis caused stock markets to plunge. Evonik Industries AG and Siemens AG (SIE)’s lighting unit Osram AG are among other German firms that have delayed initial stock sales. The country’s benchmark DAX Index (DAX), which dropped last year, has gained 20 percent in 2012.

Ziggo NV (ZIGGO), the largest cable-television operator in the Netherlands, began trading today after raising about 804 million euros in Europe’s biggest IPO this year.

Forecasts

Earnings before interest and taxes this year at Rheinmetall will probably match the 354 million euros ($470 million) posted in 2011 as a “slight improvement” in car-parts division profit makes up for “somewhat weaker” figures at the defense- equipment unit, Rheinmetall said today in its annual report. Revenue will rise 10 percent to about 4.9 billion euros.

Rheinmetall fell as much as 2.9 percent to 43.96 euros and was trading down 1.3 percent at 44.65 euros at 11:39 a.m. in Frankfurt. That pared the stock’s gain this year to 30 percent.

The company plans to raise the dividend 20 percent to 1.80 euros a share.

Rheinmetall is considering “targeted” acquisitions to expand the military-equipment division outside Germany, Eberhardt said. Cooperation among defense manufacturers is likely to increase as governments reduce military budgets, the CEO said.

To contact the reporter on this story: Alex Webb in Dusseldorf via awebb25@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net

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