Business Irish

Thursday 17 August 2017

SocGen out to raise up to €1.6bn from car-lease unit IPO

Societe Generale headquarters at La Defense business and financial district in Courbevoie near Paris
Societe Generale headquarters at La Defense business and financial district in Courbevoie near Paris

Phil Serafino

Societe Generale plans to raise as much as €1.6bn in an initial public offering of its ALD subsidiary, giving the car-leasing business funding for potential acquisitions in what is set to be Europe's second-largest IPO of the year.

The bank plans to sell 20pc of the unit and will remain the controlling shareholder, Paris-based SocGen said in a statement yesterday. The 80.8 million shares are being marketed at €14.20 to €17.40 each, raising as much as €1.4bn euro. The offering could be increased to as much as 92.9 million shares, or a 23pc stake. Companies in Western Europe have raised more than $13bn (€11.5) from IPOs in 2017, up 27pc from the same period last year, according to data compiled by Bloomberg.

The number of listings has also risen, with 102 companies beginning to trade in the region this year, versus 79 in the same period of 2016. Investor appetite for stocks in Europe is also rising, with the Stoxx 600 Index up 8.6pc this year.

Selling shares will boost SocGen's capital and give ALD more flexibility in doing deals, the bank said. A sale could increase a standard measure of bank capital by 12 to 20 basis points, according to the statement. The IPO is being managed by Credit Suisse Group, JPMorgan Chase and SocGen.

"The IPO confirms the strategic nature of ALD within Societe Generale group," CEO Frederic Oudea said in the statement. "It will allow ALD to accelerate its development and become a leader in a rapidly changing mobility space."

ALD, which leases fleets of cars to corporations and other clients, has almost 1.4 million cars and operations in 41 countries, making it the largest in Europe, according to the bank. (Bloomberg)

Irish Independent

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