AMS Osram - comment

AMS Osram has successfully raised €500 million by tapping its 2029 Euro and Dollar bonds, with the proceeds primarily used to fund the Osram minority shareholders’ put option. AMS Osram tapped the existing bonds at c.2pts discount to current trading. This is a progressive step for the Company, generating additional liquidity to fund the Osram put, which will be c. €600m in size. The Company also has an €800m RCF, which was €50m drawn in H1 to fund option exercises.

In addition, AMS Osram has released some preliminary numbers (H1 numbers are due to be released on July 31st). Revenue is a little light versus our model due to dollar weakness. EBITDA is broadly the same at €146m (versus our model of €148m). FCF after interest is €140m lower than our expectations. We don’t have the details for the discrepancy yet, but we were modelling €150m of inflow from Working Capital, which may explain it. Another explanation may be the exercise of options in the quarter, but we think that falls outside the definition of FCF for the Company.