Monday June 15, 12:57 AM
UPDATE 1-TomTom to raise 430 mln euros via placement, new shares
* Combination of private placement and rights issue
* Proceeds will be used to pay down debt
* TomTom (Amsterdam: TOM2.AS - news) founders to participate in rights issue
(Adds CEO's comments, details, background)
By Harro ten Wolde
AMSTERDAM, June 14 - Dutch navigation device maker TomTom said late on Sunday it planned to raise 430 million euros ($605 million) via a combination of a private placement and a rights issue to pay down part of its debt, a move highly anticipated by investors.
Confirming a story in the Wall Street Journal, Chief Executive Harold Goddijn told Reuters the debt-laden company had reached an agreement with Cyrte Investments BV, a Dutch technology and media investor, and Janivo Holding BV, an early investor in Tele Atlas (Amsterdam: TAAGM.AS - news) , for a private placement worth 71 mln euros.
Both investors would also participate together for about 30 million euros in a rights issue, in which Goddijn and three other company founders will participate for 169 million euros.
The rest is underwritten by a banking consortium consisting of Royal Bank of Scotland (LSE: RBS.L - news) , Rabobank, ING , Goldman Sachs (NYSE: GS - news) and Deutsche Bank (Xetra: 514000 - news) .
'The proceeds will be used to pay down part of our debt,' Goddijn said. At the end of the first quarter TomTom had 1.159 billion of net debt.
TomTom, which makes portable navigation devices for cars and mapping software for handheld computers, is struggling under heavy debt taken on when it bought Dutch digital map maker Tele Atlas for 2.9 billion euros last year after a bid war with Garmin (NASDAQ: GRMN - news) .
Details of the rights issue will be announced later. TomTom will hold an extraordinary shareholders meeting on June 30.
Separately, TomTom said it had amended its loan covenants, which require its net debt to earnings before interest, taxes, depreciation and amortisation (EBITDA) ratio to not be more than 3.5 at the end of December 2009 and June 2010.
TomTom said it was satisfied with its business performance in April and May but reiterated visibility on trading for the full year 2009 was still limited.
Shipments of unit volumes have been moderately below TomTom's expectations, while Average Selling Prices (ASP) were above levels achieved in the first quarter, it said.
($1=.7108 Euro)
(Additional reporting by Aaron Gray-Block; Editing Bernard Orr)
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