Alvotech Announces Increase in Number of Own Shares
Alvotech (ALVO) increases share capital by issuing 13 million ordinary shares at $15.98 per share, with subsidiary holding 7.7% of total shares. The company aims to meet financial obligations through the sale of 10,127,132 ordinary shares.
The capital increase and subsequent share issuance by Alvotech represent a strategic financial maneuver aimed at maintaining the company's equity structure and fulfilling financial commitments. The issuance of 13 million shares at USD 15.98 per share, subscribed by its own subsidiary, is a transaction that can be seen as a preparatory step for future financial flexibility. This move allows the company to manage its treasury shares effectively, ensuring that it has a sufficient number of shares available for potential conversion of financial instruments and for fulfilling share-based employee compensation schemes.
From an investor's perspective, the dilution effect of increasing the total number of shares might raise concerns about potential earnings per share (EPS) reduction. However, this should be weighed against the company's ability to meet its financial obligations without resorting to external financing, which could be more costly. Furthermore, the fact that the subsidiary holds these shares as treasury shares means they will not have voting rights or dividend entitlement, which minimizes the impact on existing shareholders' control and profit-sharing.
Biosimilar medicines are increasingly important in the pharmaceutical industry due to their potential to reduce healthcare costs while increasing access to vital treatments. Alvotech's focus on this sector places it in a competitive position within a growing market. The capital increase can be interpreted as a signal of the company's intent to sustain its growth and market presence. It is important to monitor how Alvotech deploys the capital raised through this share issuance, as it could be invested in R&D, expanding production capabilities, or other strategic initiatives that could enhance its market position.
Moreover, the sale of over 10 million ordinary shares previously held by the subsidiary to investors indicates active market interest in Alvotech's equity. This interest could be a positive sign of market confidence in the company's long-term strategy and its pipeline of biosimilar products. Stakeholders should pay attention to the company's forthcoming financial reports and any announcements regarding product development milestones, as these will provide further insights into the efficacy of the capital utilization.
The legal implications of Alvotech's share capital increase and the handling of treasury shares require careful consideration. The structure of the transaction, where a subsidiary subscribes to the newly issued shares, is a common practice that must comply with corporate governance rules and securities regulations. The company must ensure that all actions are transparent and provide fair treatment to all shareholders.
It's also important to note that the shares held by the subsidiary are treated as treasury shares, which typically means they are not included in the calculation of earnings per share or voting rights. This arrangement should be clearly communicated to shareholders to prevent any misunderstanding. The company's adherence to these legal standards will be important in maintaining shareholder trust and avoiding regulatory scrutiny.
03/22/2024 - 04:15 PM
Alvotech (NASDAQ: ALVO) (the “Company”), a global biotech company specializing in the development and manufacture of biosimilar medicines for patients worldwide, has increased the Company´s share capital by an amount of one hundred and thirty thousand (USD 130,000) by issuing thirteen million (13,000,000) ordinary shares. The Company’s subsidiary, Alvotech Manco ehf. (the “subsidiary”), has subscribed to all of the newly issued shares for a price of USD 15.98 per share. The shares held by the subsidiary are treated as treasury shares without voting rights or dividend entitlement.
Following the above-mentioned transactions, the subsidiary will hold 23.160.596 shares in the Company, or around 7.7% of issued shares, and the number of issued shares has increased from 289,727,462 to 302,727,462 shares as a result thereof.
On 26 February 2024, the Company announced that it had accepted an offer from investors for the sale of 10,127,132 ordinary shares, previously held by the subsidiary. The share capital increase is intended to meet the reduction in the number of treasury shares resulting from settlement of the above-mentioned sale of ordinary shares, allowing the Company to continue holding a sufficient number of shares to fulfill the Company’s commitments related to various financial obligations, including warrants, convertible financial instruments, and share-based employee compensation.
About Alvotech www.alvotech.com
CONTACTS Alvotech Investor Relations and Global Communications alvotech.ir@alvotech.com
How many ordinary shares did Alvotech issue in the recent capital increase?
Alvotech issued thirteen million (13,000,000) ordinary shares in the recent capital increase.
What is the price per share for the newly issued shares?
The price per share for the newly issued shares is USD 15.98.
What percentage of issued shares does Alvotech's subsidiary hold after the transactions?
After the transactions, Alvotech's subsidiary holds around 7.7% of issued shares.
How many shares will the subsidiary hold in Alvotech after the share capital increase?
The subsidiary will hold 23,160,596 shares in Alvotech after the share capital increase.
What was the purpose of the share capital increase?
The share capital increase was intended to meet financial obligations related to warrants, convertible financial instruments, and share-based employee compensation.
