Shareholders of Stark Corporation Plc (STARK) have overwhelmingly agreed to the plans to undertake investment in electric vehicles charging cable maker – Leoni Kabel GmbH, that would see STARK move into a new phase of growth.
More than 99% of the shareholders attending the extraordinary shareholders meeting approved the 20 billion Baht investment in the Germany based EV related business and the deal is expected to be completed by the end of this year with STARK being able to book revenues from the acquisition around the same time.
Chanin Yensudchai, chairman of the board of STARK, revealed that the extraordinary general meeting of shareholders approved the purchase of shares in LEONI Kabel GmbH and LEONIsche Holding Inc in the proportion of 100%, with a total value of no more than 560 million Euros (or approximately not more than 20.57 billion Baht).
“We anticipate that the investment will be completed by Q4 of 2022 and will recognize incremental revenue immediately, resulting in the overall picture in terms of revenue and earnings this year,” Chanin said.
He added that with LEONI board of directors having expertise and experience in automotive cable manufacturing industry for more than 20 years, STARK will be able to transfer knowledge and know-how to increase production efficiency with industrial 4.0 to apply to STARK production and to use German technology to create value added for power cable business as well.
Chanin added that STARK has also agreed to increase registered capital by 1,500,000,000 Baht from the original registered capital amount 15,875,206,607 Baht, a new registered capital of 17,375,206,607 Baht by issuing 1,500,000,000 new ordinary shares (value of 1.00 Baht per share) and resolved to allocate the company’s newly issued ordinary shares to be offered to private placement.
STARK has also acquired Business Group Automotive & EV cable (BG AM) under the name LEONI Kabel, a subsidiary of LEONI AG (LEONI), a listed company on the Frankfurt Stock Exchange Germany. And LEONIsche registered under the laws of the State of Delaware. It is a subsidiary of LEONI Bordnetz-Systeme GmbH is also a subsidiary of LEONI.
BG AM, which is 100 % acquired by STARK, is the world’s largest manufacturer of automotive cables and cables for EV charging solutions, with 2021 sales of approximately US$ 1.4 billion.
BG AM is headquartered in Germany and has 10 manufacturing plants in 7 countries, including Germany, Poland, Slovakia, Hungary, Turkey, Mexico and China, while the end-users are OEMs leading manufacturers of combustion vehicles and EVs from all over the world.
This will further expand STARK’s business into businesses related to automotive, EV and charging solutions.
STARK is already Asean’s top maker of power cable.
STARK chairman also said that with LEONI’s capabilities and technology in being the world’s No.1 automotive & EV power cable with long experience and strong Tier 1 & Tier 2 customer base worldwide, and a clear synergy with its original power cable business of STARK.
And in terms of supply chain, raw material procurement using economies of scale, and plans to expand LEONI business into ASEAN region where STARK already has a production base. And the possibility of expanding the production of STARK’S power cable to overseas markets where LEONI already has production bases.