Sept. 26 (Bloomberg) -- Osram, the lighting unit of Siemens AG, said it’s optimistic that a spinoff planned next year will work after abandoning plans for an initial public offering.
“Osram is well-prepared,” Klaus Patzak, the company’s chief financial officer, said at a conference today in Dusseldorf, Germany. “After the spinoff, and the funds we will then have available, this will soon show.”
Osram is grappling with what it calls a technological revolution as light-emitting diodes replace conventional bulbs, bringing in new rivals to companies from Siemens to Royal Philips Electronics NV and General Electric Co. LEDs are semiconductor-based, challenging the lighting market’s stable bulb-replacement business.
Patzak said Osram has built its own departments for corporate functions formerly handled by Siemens and can operate at a lower cost than what it paid the parent company. A spinoff, which will allocate Osram shares to Siemens investors, is less dependent on a window of opportunity for a listing than an IPO, he said.
The plan must first be approved by Siemens’ shareholders, who are slated to consider it at the company’s annual meeting in January. Siemens Chief Financial Officer Joe Kaeser has said the parent company must supply Osram with sufficient capital to qualify for a credit rating of between A- and BBB+.
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