HAMBURG (dpa-AFX) - Drug discovery firm Evotec has secured fresh capital to finance its ongoing restructuring. The company placed convertible bonds with a volume of 116 million euros on Tuesday evening. The move may have met with slightly less investor interest than hoped, as the Hamburg-based firm had previously targeted a volume of approximately 125 million euros. On Wednesday, the placement weighed heavily on the share price.
The stock slumped by over 8 percent to 4.55 euros in late afternoon trading, having earlier hit its lowest level since mid-April amid even steeper losses. Evotec was consequently one of the biggest laggards on the SDax, the small-cap index. Since the beginning of the year, the shares have already shed nearly 17 percent, with the decline reaching almost 40 percent over a twelve-month period.
Evotec announced on Tuesday evening that the new bonds have a seven-year maturity and carry an annual coupon of 2.625 percent. The interest rate thus sits in the middle of the previously targeted range.
The debt instruments can later be converted into shares. According to the company, the initial conversion price has been set at 6.5313 euros per share. Since investors will receive additional accrued interest at the end of the term, the effective conversion price at maturity will be approximately 7.1844 euros.
Furthermore, existing Evotec shares were placed. This involved the sale of stock for investors seeking to hedge their positions in connection with the placement.
The group intends to use the proceeds to fund its so-called 'Project Horizon'. Evotec CEO Christian Wojczewski announced the new restructuring program in March. Through this initiative, the Hamburg-based company aims to fundamentally realign its operating model. Core competencies are to be bundled into 'centers of excellence'. In turn, the number of sites will be further reduced to ten.
To this end, Evotec is closing its facilities in Munich, Abingdon in the UK, Lyon in France, and Framingham in the US. This is expected to result in the loss of up to 800 jobs. The entire program is projected to deliver sustainable savings of around 75 million euros by the end of 2027.
Evotec slipped into the red following a boom during the Covid-19 pandemic. Wojczewski, who has been in office since July 2024, aims to get the company back on track with the restructuring. The recently announced austerity measures follow previous extensive reorganizations, including site closures and job cuts. Evotec has also been thinning out its portfolio./tav/lew/stk
