Olivetti makes pounds 402m cash call

Click to follow
The Independent Online
OLIVETTI, the troubled Italian computer company, is raising up to 903bn lire ( pounds 402m) through a gigantic rights issue that will more than double its share capital.

The group, which yesterday revealed that it lost more than L650bn in 1992, says it will use the money to reduce debt and accelerate its investment programme.

Carlo de Benedetti, Olivetti's chairman, who owns 36 per cent of the group as well as an indirect holding in the Independent, said he would take up his entitlement.

Another group of shareholders - including Mediobanca, the bank that is to underwrite the issue - representing a further 5.5 per cent, have also agreed to invest.

But Digital, the US computer corporation which last year took a 5 per cent stake in Olivetti, has yet to decide if it will participate.

Shareholders are being offered six new common shares for every four common, preferred or savings shares already held at a price still to be fixed. As an alternative they can opt for half shares and half convertible bonds.

Olivetti's losses soared by 40 per cent last year to L650bn. The figures included restructuring costs of L260bn against L338bn. Over the past three years Olivetti has shed more than 30 per cent of its workforce, around 18,000.

Olivetti blamed the result on fierce competition, which has slashed margins in the computer industry, and the cost of its restructuring programme, the benefits of which it said were only beginning to appear.

Turnover was L8,000bn (L8,600bn). Operating losses rose from L28bn to L230bn. Net debts soared from L571bn to L960bn, a gearing of about 40 per cent.

Olivetti said the money raised would be used to wipe out debt as 'margins are constantly under pressure and our American competitors continue to benefit from much lower interest rates'.

Gearing will return, however, as the company embarks on its investment programme.