MILAN (Reuters) – Italian defence group Leonardo launched on Monday an initial public offering of its U.S. electronics unit DRS, which counts the U.S. military as a customer.<\/p>\n
The parent company will offer about 31.9 million shares of Leonardo DRS, or a 22% stake, on the New York Stock Exchange for $20 to $22 per share, a filing showed, valuing the stake at up to $701.8 million.<\/p>\n
The state-controlled group said last month that it aimed to complete the listing by the end of March.<\/p>\n
Leonardo Chief Executive Alessandro Profumo has said the group would keep the majority of DRS – which it bought in 2008 in a deal valuing the U.S. defence company at $5.2 billion, including $1.27 billion in debt – to \u201cmaintain a significant exposure in this strategically important market\u201d.<\/p>\n
The share sale will provide new financial resources for Leonardo, which saw its net debt increase to 3.3 billion euros ($3.94 billion) last year, from 2.8 billion euros in 2019.<\/p>\n
By 1210 GMT Milan-listed shares in Leonardo were up 1.9%, versus a 0.7% gain for Italy\u2019s blue chip index.<\/p>\n
Leonardo will receive all the proceeds from the offering, according to the filing, while DRS intends to keep future profits for growth and does not anticipate paying a regular cash dividend.<\/p>\n
To get ready for the New York listing, DRS in February said it planned to repay $237 million of related-party borrowings and issue $450 million of new debt.<\/p>\n
Goldman Sachs, BofA Securities and JP Morgan are the lead underwriters for the offering.<\/p>\n
Barclays, Citigroup, Credit Suisse, and Morgan Stanley will act as book-running managers, while Credit Agricole, IMI-Intesa Sanpaolo, MUFG and UniCredit Capital Markets will act as co book-running managers for the proposed offering.<\/p>\n
Mediobanca is acting as financial advisor for Leonardo.<\/p>\n
($1 = 0.8386 euros)<\/p>\n