(News Bulletin 247) – The company has decided to abandon its plan to sell its American activities and will therefore appeal to the market to strengthen its finances.

Egide is changing its tune to ensure its future financially. This company, founded in 1986, designs, produces and markets hermetic encapsulation components used to protect and interconnect different types of electronic or photonic processors. These high-tech boxes thus make it possible to ensure the invulnerability of electronic systems in difficult thermal, atmospheric and/or magnetic environments, which are typically found in the fields of defense and aerospace.

This Vaucluse-based company has seen its profitability deteriorate sharply in recent months, penalized by the poor performance of its American activities (Egide USA and Sentier), which represented more than half of 2022 revenues, due in particular to difficulties in supplying and recruiting staff. The high level of the company’s order book has also resulted in a significant need for working capital, which logically weighs on cash.

To recover financially, the company had decided to sell its American activities in April. With this in mind, it had signed a non-binding letter of intent with a buyer, who then put an end to the discussions.

The company finally decided on Monday to abandon the disposal project and to straighten out its American subsidiaries itself via a reorganization plan. A new management in the United States will thus be put in place. Concomitantly, Egide announced a capital increase to strengthen its finances, which will involve the issue of 2.96 million new shares for an amount of 1.92 million euros. The price of the newly issued shares was set at 65 cents per share, a discount of 26.4% compared to the closing price on Friday August 11.

Bond financing

This capital increase is 100% guaranteed by La Compagnie de Navigation Nationale, a company chaired by Patrick Molis, an entrepreneur in maritime transport, logistics, energy, aeronautics and defence.

In terms of impact for holders, Egide explains that, on a non-diluted basis, a shareholder holding 1% of the capital would see his participation reduced to 0.778% if he does not participate in the operation.

This increase will maintain the DPS (preferential subscription right). Each current shareholder will receive one PSR per share held and may use seven PSRs to subscribe to two new shares. Holders who do not wish to exercise their PSRs or only partially can sell them, since the PSRs will be listed between August 17 and August 29 on Euronext Growth. After this date, the value of the DPS will be zero.

The subscription period for the new shares will be open from August 21 to August 31 with settlement-delivery scheduled for September 7.

At the same time, Egide entered into a bond issue and subscription contract with the Compagnie Nationale de Navigation, for an amount of 750,000 euros. “This loan, maturing on December 14, 2023, will be repayable in cash or, subject to the approval of Egide’s general meeting of shareholders, in shares”, explained the company.

A team to boost sales

In total, the company therefore raises approximately 2.67 million euros via the capital increase and this bond issue, with the Compagnie National de Navigation as a lifejacket, since this company therefore guarantees the entire call. market in addition to subscribing to the bond loan. In return, this company will appoint a director within Egide, for as long as it holds more than 5% of the capital. This will be its president, Patrick Molis.

The money raised by Egide will be used to finance the company’s working capital requirement, the recovery of its American subsidiaries, as well as the recruitment of a sales team intended to boost sales.

On the Paris Stock Exchange, these announcements logically result in a fall in the Egide share given the dilution of the capital increase (as well as that of the bond issue). The Egide share thus lost 13.9% shortly before 2 p.m.