LEVERKUSEN, GERMANY: Bayer AG has sold nearly €1.5 billion ($1.58 billion) of shares in Covestro, reducing its stake from 64.2 percent to 53.3 percent.
This was achieved by selling 22 million of its shares or 10.9 percent of its stake to institutional investors at a price of €66.50 per share.
According to Reuters, Bayer sold its shares to raise cash for the takeover of agriculture giant Monsanto Co.
"The successful placement of a large block of Covestro shares underscores capital market’s confidence in this still-young company. The company intends to use the proceeds of nearly €1.5 billion to pay down debt," said Johannes Dietsch, chief financial officer of Bayer.
The current forecast for core earnings per share of the Bayer Group for 2017 takes account of a 64.2 percent holding in Covestro. The holding is now 53.3 percent. Nevertheless, Bayer still expects a mid-single-digit percentage increase in core earnings per share from continuing operations in 2017.
Covestro will continue to be fully consolidated in Bayer’s statement of financial position. In line with applicable accounting standards, Covestro will still be stated as an operating segment until Bayer yields control of Covestro because it no longer has a majority at the annual stockholders’ meeting, said the company.
© Worldofchemicals News
Read More: Bayer sells 10.9 pc stake in Covestro for $1.5 billion
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