German space tech group OBH to issue new shares to boost investment

German space technology firm OHB plans to issue new shares to raise around €500 million ($580 million) before taxes, the company said on Monday. 

OHB said it plans to invest the net proceeds from the capital increase in the industrialization of production, as well as in launch vehicles and future projects.

“Europe is investing heavily in independent space capabilities, and we have been at the heart of this development for over four decades,” said chief executive Marco Fuchs. 

"The planned transaction will enable us to drive our growth together with existing and new investors who wish to be part of Europe’s strategic independence in space."

Existing shareholders are to be given the first opportunity to purchase the new shares.

However, the main shareholders – the Fuchs family and investor Orchid Lux HoldCo S.à r.l. – have decided not to take up this option. This means that most of the new shares can be sold directly to selected investors.

The Fuchs family has said that it intends to retain control of the majority of voting rights.

No details were given regarding the issue price of the new shares.

In an initial reaction on the stock market, shares of Bremen-based OHB fell by around 10%.

In the case of a capital increase, the share price usually drops because the company’s equity is spread across a larger number of issued shares. Furthermore, new shares are often issued a lower price to attract buyers.