Rheinmetall Shares Plunge After EUR1 Billion Bonds Issue

By Mauro Orru

Shares of Rheinmetall AG slumped Tuesday after the German defense company launched a convertible bonds issue aimed at raising 1 billion euros ($1.09 billion) to finance a significant portion of its planned acquisition of Spain's Expal Systems SA.

At 1100 GMT, Rheinmetall shares traded 6.3% lower at EUR213.00.

Rheinmetall, one of Europe's biggest arms makers, agreed to buy Expal for EUR1.2 billion in November last year to expand production of artillery and mortar ammunition amid "massive demand" as the Ukraine war continues.

Rheinmetall launched two series of unsubordinated, unsecured convertible bonds that are expected to mature on Feb. 7, 2028 and Feb. 7, 2030. Rheinmetall is offering the bonds to investors outside the U.S., Australia, Japan and South Africa.

The company didn't specify how much of the net proceeds would go into the Expal acquisition, but said remaining costs would be funded with cash on hand and bank loans.

Write to Mauro Orru at [e-mail]; @MauroOrru94

(END) Dow Jones Newswires

January 31, 2023 06:23 ET (11:23 GMT)

Copyright (c) 2023 Dow Jones & Company, Inc.