DGAP-Adhoc: SGL CARBON SE: SGL Group signed agreement to

SGL CARBON SE / Key word(s): Disposal 20.10.2016 08:48 Disclosure of an inside information according to Article 17 MAR, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- * Enterprise value of 350 million euros agreed - translating into cash proceeds of at least 200 million euros * Transaction expected to close in the first half of 2017 * In order to maximize proceeds, the cathodes, furnace linings, and carbon electrode business (CFL/CE), which is also part of the business unit Performance Products (PP), will be sold separately in 2017 * SGL Group evaluating the merits and viability of a potential near term rights issue to further improve the capital structure and restore key financial metrics to create a solid foundation for the growth businesses CFM and GMS Wiesbaden, October 20, 2016. Today, SGL Carbon SE signed the sale and purchase agreement to sell its graphite electrode (GE) business to Showa Denko (Japan). The two parties have agreed on an enterprise value (cash and debt free) of 350 million euros, which, after deduction of standard debt-like items (mainly pension and restructuring provisions) results in cash proceeds of at least 200 million euros. The final proceeds will be determined based on the balance sheets at closing. The transaction is subject to customary closing conditions, relating in particular to antitrust approvals. Closing is expected in the first half of 2017. Showa Denko is one of Japan's leading chemical companies. In the fiscal year 2015, Showa Denko generated sales of 781 billion yen (6.8 billion euros) and an operating income of 34 billion yen (0.3 billion euros). The company employed a workforce of 10,561 at the end of 2015. Following the closing of the transaction, approximately 900 employees and six production sites in Germany, Austria, Spain, USA, and Malaysia will be transferred from SGL Group to their new owner. The sale will result in impairment charges of 40-50 million euros in the current fiscal year of SGL Group, which are related to transaction costs and the continuation of the GE business until the closing date. The cash proceeds equal the book value as of September 30, 2016. Thus, the transaction does not trigger any write-downs on the book value in the GE business. To maximize proceeds, the CFL/CE business, which is also part of the business unit PP, will be sold separately, with the sales process to be continued in early 2017. Given the outcome of the GE sale, SGL Group is now confident to achieve more than the book value of the former business unit PP in the aggregated transactions. SGL Group is convinced that the proceeds of the GE sale and the expected proceeds of the CFL/CE sale will contribute to a significant reduction of the Group's net debt position and thereby improve the balance sheet ratios. In addition, the company is currently evaluating the merits and viability of a potential near term rights issue utilising the existing authorized capital framework to further improve the capital structure and restore key financial metrics to create a solid foundation for its growth businesses CFM and GMS. Against the backdrop of the disposal procedures for the GE and the CFL/CE businesses, the measures to adjust the administrative structures to a smaller SGL Group following the entire PP disposal, and the related other transitional matters in connection with the repositioning of the SGL Group to focus on its growth businesses CFM and GMS, the company decided to withdraw its guidance as provided in its report on the first half year 2016 with immediate effect, and to abstain for the time being from providing any short term profit guidance during this transformation phase. SGL Group plans to resume providing a new profit guidance around the time of the publication of its 2016 annual report in March 2017. --------------------------------------------------------------------------- Information and Explanation of the Issuer to this News: Important note: This document contains statements relating to certain projections and business trends that are forward-looking, including statements with respect to SGL Group's outlook and business development, including developments in SGL Group's Composites - Fibers & Materials and Graphite Materials & Systems businesses, expected customer demand, expected industry trends and expected trends in the business environment, statements with respect to the sale of the graphite electrodes (GE) business and the expected sale of the cathodes, furnace linings, and carbon electrodes (CFL/CE) businesses, statements related to SGL Group's cost savings programs and statements with respect to the intention to conduct a share capital increase. You can generally identify these statements by the use of words like 'may', 'will', 'could', 'should', 'project', 'believe', 'anticipate', 'expect', 'plan', 'estimate', 'forecast', 'potential', 'intend', 'continue' and variations of these words or comparable words. These statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about SGL Group's businesses and future financial results, and readers should not place undue reliance on them. Forward-looking statements do not guarantee future performance and involve risks and uncertainties. These risks and uncertainties include, without limitation, changes in political, economic, legal and business conditions, particularly relating to SGL Group's main customer industries, competitive products and pricing, the ability to achieve sustained growth and profitability in SGL Group's Composites - Fibers & Materials and Graphite Materials & Systems businesses, the impact of any manufacturing efficiencies and capacity constraints, widespread adoption of carbon fiber products and components in key end-markets of the SGL Group, including the automotive and aviation industries, the inability to execute additional cost savings or restructuring measures, availability of raw materials and critical manufacturing equipment, trade environment, changes in interest rates, exchange rates, tax rates, and regulation, available cash and liquidity, SGL Group's ability to refinance its indebtedness, development of the SGL Group's pension obligations, share price fluctuation, the satisfaction of the closing conditions for the disposition of the graphite electrodes (GE) business, including obtaining relevant regulatory approvals, the possibility that the length of time necessary to consummate the disposition of the graphite electrodes (GE) business may be longer than anticipated, the achievement of the expected benefits of the disposition of the graphite electrodes (GE) business, the possibility that the SGL Group may suffer as a result of uncertainty surrounding the disposition of the graphite electrodes (GE) business, the anticipated effect of the disposition of the graphite electrodes (GE) business may have on SGL Group's financial condition and results of operations, the ability to sell the cathodes, furnace linings, and carbon electrodes (CFL/CE) businesses at a price satisfactory to SGL Group or at all and other risks identified in SGL Group's financial reports. These forward-looking statements are made only as of the date of this document. SGL Group does not undertake to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. 20.10.2016 The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de --------------------------------------------------------------------------- Language: English Company: SGL CARBON SE Söhnleinstraße 8 65201 Wiesbaden Germany Phone: +49 (0)611 6029 - 0 Fax: +49 (0)611 6029 - 101 E-mail: investor-relations@sglgroup.com Internet: www.sglgroup.de ISIN: DE0007235301 WKN: 723530 Indices: SDAX Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange End of Announcement DGAP News-Service ---------------------------------------------------------------------------