AMS Osram - comment

AMS Osram announced sale and leaseback for c. €450m on its plants, €400m of which relates to its new Kulim 8-inch facility in Malaysia.  None of the technology, R&D or manufacturing assets are part of the sale and leaseback which is expected to close Q4/Q1 2024 and run for 10yrs.  The overall amount is €150m higher than the announced €300m  from September as part of its comprehensive refinancing package.  Q3 results are due tomorrow and we expect the Company to downsize its #800m High Yield Bond Issue and its €800m equity raise on the back of the increased sale and leaseback.  Theoretically, all of the decrease should come from the debt side (as the sale and leaseback is effectively debt) but we suspect it will be shared.