Rapala VMC Corporation Announces EUR 25 Million Capital Securities
Rapala VMC Corporation, a prominent player in the fishing tackle industry, has taken a significant step by issuing hybrid capital securities worth EUR 25 million. This strategic move is expected to bolster the company’s financial framework and enhance its long-term operational strategies.
Understanding the Capital Securities
The newly issued hybrid capital securities come with a fixed coupon interest rate of 9.000 percent per annum. This attractive rate is applicable until a specified Reset Date, allowing flexibility in managing interest rates thereafter. Post this date, the interest will convert to a floating rate, as outlined in the terms governing the securities.
One of the key features of these securities is their indefinite structure; they do not have a maturity date. However, Rapala VMC retains the right to redeem them on the reset date and on each subsequent payment date, offering an advantageous option for the company’s financing structure.
Investor Confidence and Participation
Prior to this issue, on November 14, Rapala VMC's major shareholding entity, Viellard Migeon Et Compagnie Sa, revealed plans to transition its EUR 7.2 million existing holdings into the new capital securities. This decision not only demonstrates confidence in the company's future but also signals a robust interest from both existing and new investors. The overwhelming demand resulted in a substantial oversubscription, compelling Viellard Migeon to increase its commitment to EUR 3.1 million.
Cyrille Viellard, President and CEO of Rapala VMC, expressed gratitude for the faith investors have shown in the company. He emphasized that the strong backing in these refinancing plans underscores the positive trajectory of Rapala VMC's performance and validates the effectiveness of the company's strategic direction.
Financial Insights and Strategic Goals
The hybrid capital securities are classified as subordinated to the company’s other debt, which supports the strength of the balance sheet. These securities will be reflected as equity in Rapala VMC's consolidated financial records prepared under IFRS standards. However, it's important to note that they do not grant shareholders any rights or dilute current holdings.
The funds raised from this issuance will primarily aim at refinancing previously issued hybrid capital securities from late 2023, alongside general corporate purposes that support Rapala VMC’s ongoing operational and growth strategies.
Corporate Background of Rapala VMC
With a strong global presence, Rapala VMC Group stands as the foremost fishing tackle company, renowned for its extensive distribution network. The firm excels in manufacturing fishing lures, treble hooks, and fishing-related tools. Manufacturing operations are strategically located in Finland, France, Estonia, and the UK.
For 2024, the Group reported impressive net sales of EUR 221 million and employs around 1,400 professionals across approximately 40 countries, reflecting its stature and competitiveness in the fishing industry. The company has been publicly traded on the Nasdaq Helsinki stock exchange since 1998, further underscoring its established market presence.
Key Management Contacts
For further inquiries regarding this financing initiative or general corporate affairs, the contact individuals are:
Cyrille Viellard, President and CEO
Miikka Tarna, Chief Financial Officer
Tuomo Leino, Investor Relations
Phone: +358 9 7562 540
Frequently Asked Questions
What are the hybrid capital securities issued by Rapala VMC?
The hybrid capital securities are financial instruments that allow Rapala VMC to raise capital while providing investors with fixed and floating interest rate benefits.
Who are the major investors in this capital security issuance?
Viellard Migeon Et Compagnie Sa is one of the significant participating investors in the capital securities issuance.
What will the proceeds from the capital securities be used for?
The proceeds will primarily refinance existing hybrid capital securities and support general corporate initiatives.
When is the Reset Date for the hybrid capital securities?
The Reset Date for the securities is set to be November 27, 2028, after which the interest will transition to a floating rate.
How does this issuance impact current shareholders?
The issuance of these capital securities does not dilute current shareholders’ holdings, as they do not confer shareholder rights.
