Schmolz & Bickenbach AG rose as much as 12 percent after the unprofitable Swiss steelmaker said Russian billionaire Viktor Vekselberg may take part in a capital increase through his Renova Group investment company.
The shares traded 8.1 percent higher at 2.55 Swiss francs at 11:18 a.m. in Zurich, giving the company a market value of 301 million francs ($317 million). The intraday percentage gain was the biggest since Jan. 24.
Renova, which is the largest shareholder in Swiss companies including textile machinery maker OC Oerlikon AG and pumpmaker Sulzer AG, has formed a group with the steelmaker’s main family shareholders and may participate in a capital restructuring, Emmenbruecke-based Schmolz said in a statement today.
“We are open to Renova’s participation,” Schmolz Chief Financial Officer Hans-Juergen Wiecha said in a phone interview.
Schmolz is in talks about reorganizing its ownership with a select group of investors including other steelmakers, Wiecha said. Renova and the family shareholder group together have 20.46 percent of voting rights, Schmolz said. Renova spokesman Rolf Schatzmann declined to comment.
The supplier of steel to carmakers hasn’t yet decided what format the capital revamp will take and the amount of funds needed will depend on other restructuring measures which the company is pursuing, Wiecha said. The move must be approved at Schmolz’s annual shareholders meeting in June, he said.
Shares of the steelmaker have fallen more than 90 percent in the past five years as slowing demand for steel in Europe pressured the company’s finances. Former Chief Executive Officer Benedikt Niemeyer and CFO Axel Euchner were replaced with current chief Johannes Nonn and Wiecha as finance head in June.
Vekselberg, the world’s 57th-richest man, sold a 12.5 percent stake in TNK-BP, the Russian oil venture he held with BP Plc and four other Russian billionaires, for $7 billion last month. Through Renova Group, he owns owns 47.9 percent of Oerlikon and 31.2 percent of Sulzer.
Schmolz said March 8 it would look at “equity measures” to reduce its debt after agreeing on amendments to credit contracts with banks for financing lines of about 930 million euros ($1.2 billion) due in March and April 2015.
Schmolz is also being sued by U.S. hedge fund GoldenTree Asset Management LP, which accused the Swiss company of fraudulently marketing bonds in May 2012.