May 12, 2020 / 7:02 AM / in 25 days

Bang & Olufsen plans share issue to cope with coronavirus crisis

FILE PHOTO: The logo of consumer electronics company Bang & Olufsen is seen at a shop in Vienna, Austria, July 7, 2016. REUTERS/Heinz-Peter Bader

COPENHAGEN (Reuters) - TV and stereo maker Bang & Olufsen (B&O) said on Tuesday it planned to raise 400 million crowns ($58 million) via a rights issue, equivalent to half its market value, to survive the coronavirus crisis that has knocked its already weak shares.

Shares in B&O, which have fallen about 66% in the past year, were down more than 9% on Tuesday at their lowest since 1994.

The Danish company, known for its exclusive TVs and speakers that sell for up to $80,000, is joining other companies seeking emergency funds and rearranging debts as the coronavirus pandemic eats into corporate cash.

“Bang & Olufsen is in a serious situation, where we need to raise new capital to help us get through the global COVID-19 crisis,” Chairman Ole Andersen said in a statement.

B&O was struggling with declining sales before the coronavirus outbreak and subsequent lockdowns paralysed retail sales around the globe. It has issued five profit warnings in just over a year.

An extraordinary general meeting will be held on June 3 and B&O said it had already secured support from a number of institutional investors, including its three largest Danish shareholders ATP, Chr. Augustinus Fabrikker and Færchfonden.

Sales for the 2019/20 financial year ending in May are now seen at the lower end of the guidance for a fall of 20%-29%.

Its operating margin before special items is expected to be negative by between 10%-15% and would probably end at the low end of the range, it said.

Next year, B&O expects sales of 2.2 billion crowns, an operating loss before special items of 100 million and a negative free cash flow of 200 million crowns.

Reporting by Stine Jacobsen; Editing by Louise Heavens and Edmund Blair

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below