Fincantieri, what changes after the grouping…

One of the key steps for Fincantieri was the stock market grouping operation in a ratio of one new share for every 10 old shares which took place on Monday 17 June, the day on which the news of the death of the company’s president also arrived unexpectedly, Claudio Graziano, at the top of Fincantieri since 2022. In this regard, after the close of the session the company communicated that in order to maintain the continuity of governance, the board of directors met to give the CEO, Pierroberto Folgiero, on an interim basis, until the president is replaced, some of the powers that had been conferred on Graziano.

The terms and objectives of the grouping

The operation to replace old shares with newly issued ones implemented on Monday 17 June concretely involved the grouping of shares on a ratio of 1 new ordinary share for every 10 existing ordinary shares.

In detail, the company’s board of directors approved the split with a 1:10 ratio of the 1,699,651,360 Fincantieri ordinary shares, all without an expressed par value, into 169,965,136 newly issued Fincantieri ordinary shares, having the same characteristics as the ordinary shares issued , by withdrawal and cancellation.

It should be underlined that the official price of Fincantieri ordinary shares recorded on Euronext Milan on 14 June 2024, useful for valorising the fractions generated by the application of the split ratio, was equal to 0.5192 euros.

The board of directors’ announcement of its intention to implement this operation on the stock came immediately after the shareholders’ meeting called last June 11th. On that occasion the shareholders voted in favor of giving the board of directors the full say on the possibility of increasing the share capital up to 500 million euros.

A session with big waves for the title

The mix of “market mover” factors between the opening grouping operation and the subsequent news arriving in the first hours of trading on the Italian Stock Exchange fueled a day of high volatility for Fincantieri prices on Monday 17 June. Having started rising by more than 1%, indicating a positive reception for the split operation, the stock represented at that point already by the new shares ended up losing more than 3% during the session and then return to positive but ultimately close with a drop of more than one percentage point.

Analysts cut target prices

The split of the shares had an impact on the target prices of the analysts who follow the Fincantieri stock. An example comes from Banca Akros. Its experts have announced that they have changed the target price on Fincantieri, taking the previous target price of 0.6 euros and multiplying it by the grouping factor 10. The result is that Banca Akros’s target price on Fincantieri is now 6 euros . Since this is a technical operation already communicated to the market, the rating on the security has not changed and remains at “neutral”.

Equita is also among the research offices that had recently communicated their positioning on Fincantieri. The experts, following the release of the company’s first quarter data, confirmed that they had a “hold” opinion on the stock and a target price of 0.54 euros. By applying the grouping factor, the target from a purely mathematical point of view would become 5.4 euros.

The next step is the capital increase

Once the grouping has been completed, the board of directors can proceed with the capital increase plan of 500 million euros. This is made up of a first tranche of 400 million, implemented through the issue of ordinary shares, to which is attached a warrant which is a securitized option which gives the right to subsequently subscribe for additional ordinary shares for payment.

The second part of the increase will concern the remaining 100 million expected from the overall capital increase. It will be obtained through the issue, in one or more tranches, of ordinary shares to service the exercise of the warrants, to be subscribed within a maximum of 36 months from the full release of the first tranche of the capital increase. The characteristics of the warrant have not yet been disclosed. In fact, as regards the entire 500 million capital increase operation, all the details will be determined by the Fincantieri board of directors only close to the start of the option offer relating to the capital increase itself.

Capital increase secured by Cdp Equity and pool of banks

Regarding the success of the capital increase, the shareholder Cdp Equity which holds a share of approximately 70% of Fincantieri has ensured an irrevocable commitment to subscribe to the new shares linked to its current share resulting from the first tranche of the capital increase for a maximum of 287 million. Furthermore, it is envisaged that BNP Paribas, Intesa Sanpaolo, Jefferies, JP Morgan and Mediobanca may sign a guarantee contract for the subscription and release of any new shares that may not be subscribed at the outcome of the auction of the unexercised rights, up to the amount remaining maximum of the first tranche of the capital increase.