The shareholders of the ailing steel manufacturer Swiss Steel approved the latest capital increase with almost no dissenting votes. But the dispute between the main shareholders leaves its mark.
For Martin Haefner it was a home game. This time he didn’t have to fear any resistance, because it was clear from the start that without the wealthy investor nothing would work at the ailing steel manufacturer Swiss Steel.
Silent shareholders
The shareholders waved the latest capital increase – the third in just four years – through at an extraordinary general meeting (AGM) on Thursday in Emmenbrücke with virtually no opposition. The yes share in the vote reached 99.79 percent. During the entire AGM there were only two requests to speak from the group of 130 shareholders who were present in the hall.
“Martin Haefner was and is the key to the future of Swiss Steel,” said Board Chairman Jens Alder. Until now, the owner of the car importer Amag held 32.7 percent of the steel company’s capital. According to his own statements, he has already invested around 600 million francs.
Takeover Commission grants exceptional approval
Thanks to the latest capital increase, Swiss Steel will receive a gross amount of almost 287 million francs. In euros – the company’s balance sheet is in the European single currency – it should be at least 300 million euros thanks to currency hedging.
Haefner has promised to underwrite the entire volume if necessary. Because the number of shares will be doubled at the same time, he could now have a stake of around two thirds. Normally this would require him to make a takeover offer to all shareholders. However, at the request of Swiss Steel, the Takeover Commission released him from such an obligation as part of a transaction-specific opting-out clause. In this case, the authority found that renovation took precedence.
As Haefner stated with satisfaction after the AGM, the other two main shareholders also approved the capital increase. Things were different in December 2019, when shareholders voted on the first of the most recent three financing rounds. The investment company Liwet led by the Russian investor Viktor Vekselberg, which, as Haefner’s largest shareholder at the time, did not want to be overtaken, only gave up its resistance during the meeting.
This time, not a peep was heard from Liwet representatives, who, together with the vehicle AO Kompleksprom, previously controlled 25.9 percent of the capital. Peter Spuhler was also nowhere to be seen or heard. The entrepreneur had only declared around ten days ago that he wanted to exit as a major shareholder (with a previous share of 20.4 percent).
A pale chairman of the board of directors
So it was left to Haefner and Alder alone to point out disagreements among the major shareholders. According to Alder, the main owners have not been able to agree on a new business plan presented to them by management for six months. This was very stressful, said the President.
Alder led the general meeting calmly, but it was clear that the disputes had cost him personal strength. He didn’t officially say goodbye yet. However, familiar circles on the sidelines of the general meeting confirmed that he would no longer run for re-election.
Shareholders should find out who will be available as the new president at the end of April. According to the company, the invitation for the next regular general meeting will then be sent out, which has now been scheduled for May 23rd.
Difficult mission for the board of directors
Spuhler’s two representatives on the Swiss Steel supervisory board have already given up their mandate. Either way, management and the board of directors, which currently only has five members, continue to have a difficult mission ahead of them.
From today’s perspective, it is completely unclear whether the group is, as Alder claimed, “at the beginning of a new era” thanks to the recent capital increase. As the company itself has calculated, the fresh funds now flowing in, together with refinanced bank loans, should ensure survival “for at least the next four years”. But the group must continue to win back the trust of customers, suppliers and employees.
Swiss Steel shares jumped 8.5 percent on Thursday. But even with that they were traded for less than 8 centimes. The market capitalization is less than 240 million francs. For most investors, the steel company’s securities seem to have long since become a non-valuer that they would rather keep their hands off.
