BAD HOMBURG, Germany, May 4 /PRNewswire-FirstCall/ -- - The Combination of a Change of the Legal Form into a KGaA With the Creation of a Single Share Class is a Strategic Step That Increases the Financial Flexibility of Fresenius Medical Care Going Forward and Improves Trading Liquidity and the Overall Attractiveness of the Company’s Ordinary Shares
Fresenius Medical Care AG (“Company”) (Frankfurt Stock Exchange: FME, FME3) , the world’s largest provider of Dialysis Products and Services, today announced its intention to offer the holders of the Company’s approx. 26.4 million preference shares the opportunity to convert these shares into ordinary shares. Furthermore, the Company will ask its ordinary shareholders to approve a change of the legal form from an “Aktiengesellschaft” (AG) to a “Kommanditgesellschaft auf Aktien” (KGaA, see glossary).
Ben Lipps, Chief Executive Officer of Fresenius Medical Care, commented: “We expect these initiatives will improve and enhance our financial flexibility to the benefit of all stakeholders. The step toward just one share class will significantly improve trading liquidity in the ordinary shares and will simplify our share structure. The share conversion offers preference shareholders the opportunity to switch to ordinary shares at attractive conditions. Importantly this new corporate structure will allow for continued high standards of corporate governance and transparency as today. We are very excited about these initiatives allowing us to look ahead with confidence toward further growth opportunities and increasing profitability”.
Details on the conversion of preference shares
The preference shareholders (including the holders of the American Depository Shares representing preference shares) will be granted the opportunity to convert their preference shares into ordinary shares. The preference shareholders who participate in this program pay a “premium” of EUR 12.25 per share for the conversion. The premium corresponds to approx. 2/3 (two thirds) of the price difference between the ordinary and preference shares of the weighted average stock exchange prices in the three months prior to this announcement. On this basis, preference shareholders can therefore obtain ordinary shares, by means of this conversion, at an effective discount of EUR 6.14 or 10% per share compared to yesterday’s closing price of the ordinary shares.
Conversion of preference shares into ordinary shares will be possible during a four to six weeks conversion period. The technical details of the conversion including the exact timing will be determined by the Management Board with the approval of the Supervisory Board and will be send out in a prospectus to be distributed by the Company when it makes the conversion offer. There is no intention to extend the conversion period or to launch another offer for conversion in the future.
Details on change of the corporate legal structure to KGaA
In combination with the proposed conversion of Fresenius Medical Care preference shares into ordinary shares, the Supervisory Board and the Management Board propose a change of the legal structure of the Company into a Kommanditgesellschaft auf Aktien (KGaA) under German law.
In the course of this transformation of legal form, a subsidiary of Fresenius AG in the legal form of an “Aktiengesellschaft” (stock corporation under German law) will be established as general partner of the Fresenius Medical Care AG & Co. KGaA. The Management Board of the general partner - which will be identical with the current Management Board of Fresenius Medical Care - will assume the management of Fresenius Medical Care. As long as Fresenius AG maintains ownership of more than 25% of the shared capital of the Company, it will retain its current controlling position. This includes the right of full consolidation despite the expected dilution of its shareholding in the ordinary voting shares below 50% through the conversion of the current non-voting preference shares into ordinary shares.
Given Fresenius AG’s current controlling influence in the shareholders’ meeting due to its majority in the ordinary shares the transformation of legal form will factually not affect the position of the ordinary Free Float shareholders. The proposed change in the legal form of Fresenius Medical Care will allow to continue the high standards of corporate governance and transparency as today.
Extraordinary General Meeting
In an Extraordinary General Meeting of Fresenius Medical Care, the ordinary shareholders will be asked to approve the change of the legal form as well as the conversion of preference shares into ordinary shares. The approval of the preference shareholders is required to the conversion of preference shares into ordinary shares. The exact timing of the meeting will be announced at a later date.
Press Conference
Fresenius Medical Care will also host a Press Conference on May 04, 2005 at 12am CET at its headquarters in Bad Homburg. The company invites journalists to listen to the live video webcast of the meeting at the Company’s website http://www.fmc-ag.com/. A replay will be available shortly after the meeting.
DISCLAIMER
This announcement does not constitute an offer to convert preference shares into ordinary shares or a solicitation of offers to convert preference shares into ordinary shares, or an offer to sell or solicitation of any offer to purchase shares of Fresenius Medical Care KGaA. Such offer may be made only at a later stage and, in certain jurisdictions, by a prospectus.
Glossary for Kommanditgesellschaft auf Aktien:
A Kommanditgesellschaft auf Aktien is a partnership limited by shares. Like the German ‘AG’ (i.e. Aktiengesellschaft = stock corporation), the KGaA is an entity with its own legal identity. Unlike in the case of an AG, however, the KGaA has two groups of shareholders: personally liable general partners on the one hand and limited liability shareholders on the other. The limited liability shareholders have an interest in the stated share capital and, as in the case of other publicly quoted companies, are not personally liable for the debts of the company.
Fresenius Medical Care AG is the world’s largest, integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than 1,300,000 individuals worldwide. Through its network of approximately 1,630 dialysis clinics in North America, Europe, Latin America and Asia-Pacific, Fresenius Medical Care provides Dialysis Treatment to approximately 125,900 patients around the globe. Fresenius Medical Care is also the world’s leading provider of Dialysis Products such as hemodialysis machines, dialyzers and related disposable products. For more information about Fresenius Medical Care, visit the Company’s website at http://www.fmc-ag.com/.
This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including changes in business, economic and competitive conditions, regulatory reforms, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG’s reports filed with the US Securities and Exchange Commission. Fresenius Medical Care AG does not undertake any responsibility to update the forward-looking statements in this release.
Fresenius Medical Care AG
CONTACT: Joachim Weith, Corporate Communications, Tel.:+49-6172-6082101, Fax: +49-6172-6082294, e-mail:pr-fmc@fmc-ag.de