Saipem (MI:SPM) shares have plunged around 70% from July 11 after the company acknowledged demand for additional shares was less than expected.
On July 11, Saipem was trading on the Euronext at 3.79 euros, as of July 13 it had fallen to 1.1 euro, a decline of 71%.
The company issued shares on July 11 raising around 1.4 billion euros ($1.4bn). Saipem had hoped to raise 2bn euros ($2bn).
Buyers subscribed for only 70% of the shares on offer. Bidders acquired 1.38bn shares, via options, with around 597mn left over.
Today, the company said it had sold another 195mn shares on Euronext Milan at auction. This is around 9.9% of the new shares.
Saipem noted that the offer was guaranteed and had underwriting commitments from Eni and CDP Industria. An array of international banks agreed to acquire any new shares still available, paying up to 1.12bn euros ($1.12bn).
BNP Paribas, Citigroup, Deutsche Bank, HSBC, Intesa Sanpaolo and UniCredit acted as joint global co-ordinators, Saipem said. ABN AMRO, Banca Akros – Gruppo Banco BPM, Banco Santander, Barclays, BPER, Goldman Sachs International, Société Générale and Stifel were joint bookrunners. Both sets of banks agreed to the underwriting agreement.
As it stands, the it seems the banks will need to absorb a 20.1% share of the capital increase. This is worth around 400mn euros.
The Italian service company will announce the final outcome of its capital increase on July 15.