Implications of the announced rights issue

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Right issue mechanics

• Rights issues are commonly used by listed companies to raise new equity in the context of acquisitions
• In this instance, ams intends to use the proceeds of the EUR 1.65bn rights issue to partially refinance the EUR 4.4bn bridge facility used in context of the acquisition of OSRAM Licht AG and retain its commitment to maintain a sustainable capital structure
• During the rights issue, existing ams shareholders are offered tradable subscription rights to acquire new ams shares pro-rata to their current shareholding
• Existing shareholders can either exercise these subscription rights to buy new shares, or sell these rights in the market
• Existing shareholders are economically protected regardless of the price at which the new shares will be issued
• There is no economic dilution if an existing shareholder participates fully in the rights issue – the share in the company and of future profits will be the same regardless of the ratio old shares / new shares or the number of new shares issued
• New investors have the following two options to participate in the rights issue:
  • acquire ams shares in the market ahead of the rights issue until Friday, March 13 (before SIX Swiss Exchange market close); this will give them the opportunity to participate pro-rata in the rights issue; or
  • buy subscription rights during the rights trading period and exercise these rights
• The exercise of the subscription rights may be subject to the limitations arising under local law
• Please find below a detailed FAQ section including further information

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Indicative timetable for the rights issue

• 24 January 2020 – EGM approved rights issue
• 11 March 2020 - Announcement of terms of the rights issue 
• 13 March 2020 - Publication of prospectus
• 16 March 2020 - Start of subscription rights trading and exercise period
• 26 March 2020 - End of rights trading period
• 30 March 2020 - End of rights exercise period
• 2 April 2020 - Expected date for listing and admission to trading 
• 2 April 2020 - Expected date for settlement and delivery of the offered shares against payment of the offer price

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FAQs

1. How does a rights issue normally affect the share price of a company?

• The share price will be reduced by the value of the Subscription Right (see question 2) and will be traded at a so-called theoretical ex-rights price ("TERP")

• The TERP is mainly a function of the Rights Issue Discount (see question 3) and the overall volume raised

• Existing shareholders are economically compensated for the share price reduction from the Rights Issue Discount by the value of the subscription rights granted to them

2. What are Subscription Rights?

• Existing shareholders receive subscription rights to subscribe to new shares at the offer price to enable existing shareholders to maintain their ownership stake in the company

3. What is the impact of the Rights Issue Discount on shareholders?

• Based on the concept of such rights issue, ams shareholders are in an efficient market economically neutral regardless of whether they participate in the rights issue or sell their rights, and regardless of the size of the Rights Issue Discount
• Shareholders are economically compensated with subscription rights that can be sold to offset the reduction in share price

4. Will there be a rights trading period?

• Yes, there will be a rights trading period from 16 March until 26 March 2020
• During this period subscription rights can be sold (or bought) at their prevailing market value

5. How many new shares can I subscribe for with my subscription rights?

• Every shareholder receives Subscription Rights in proportion to its current ownership level to ensure that he can participate pro-rata and maintain his ownership to prevent any ownership (in the absence of fractions) and value dilution

• For each existing ams share, ams shareholders will receive one subscription right . 4 rights entitle each eligible holder to purchase 9 offered shares at the offer price of CHF 9.20

6. How can I participate in the rights issue?

• Existing ams shareholders typically receive a letter from their depository banks informing them about their options regarding their Subscription Rights:
  • completely or partially exercise their subscription rights to subscribe to new shares; meaning they will have to pay the offer price; or
  • completely or partially sell subscription rights in the market
• Shareholders are encouraged to instruct their depository banks how they would like to proceed to avoid the expiration of subscription rights
• New investors interested in participating in the rights issue have the following options:
  • acquire ams shares in the market ahead of the rights issue; or
  • buy Subscription Rights during the rights trading period and exercise them

7. Do I have to participate in the rights issue?

• ams shareholders who do not wish to participate in the rights issue can sell their Subscription Rights during the rights trading period on SIX Swiss Exchange
• Shareholders can also partially sell their Subscription Rights while exercising their remaining rights

8. What happens if I take no action?

• ams shareholders are encouraged to provide their depository bank with instructions whether they would like to completely or partially exercise or completely or partially sell their Subscription Rights
• If no instructions are given, there is a risk that the Subscription Rights will expire without compensation

9. Will I be able to purchase shares more cheaply during the rights issue than via normal stock exchange trading? What will I receive if I sell my Subscription Rights?

• Existing shareholders can use Subscription Rights to subscribe to additional shares at the offer price
• The proceeds from a sale of Subscription Rights depend on the rights issue terms which will be communicated at a later stage

10. How many shares will be issued and at what price?

• The number of new shares and the offer price will be communicated at a later stage

11. Who can I ask if I have further questions?

• Please contact ams Investor Relations (investor@ams.com) in case of further questions