Payments firm Worldline plans 500-million-euro capital injection
FILE PHOTO: The logo of payments company Worldline is seen at the company headquarters in the financial and business district of La Defense, near Paris, France, October 26, 2023. REUTERS/Gonzalo Fuentes/File Photo
Worldline on Thursday unveiled plans to raise 500 million euros ($583 million) by tapping some of France's biggest banks to fund a strategy aimed at turning around the payments firm following years of setbacks.
The two-stage capital increase will begin with a 110-million-euro reserved share sale to Bpifrance, Credit Agricole and BNP Paribas, followed by a 390-million-euro rights issue open to all shareholders.
The three lenders have committed to subscribe around 135 million euros to the rights issue.
Upon completion of the capital raise, expected in the first quarter of 2026, Bpifrance will hold a 9.6 per cent stake in Worldline, Credit Agricole will own 9.5 per cent, with BNP Paribas at 7.9 per cent.
Swiss stock exchange operator SIX Group, Worldline's biggest investor, said it has accepted dilution as it will not participate in the capital increase. SIX expects a 550-million-Swiss-franc ($693.48 million) impairment on its Worldline stake and said it will manage it as a financial investment in the future.
NEW PLAN FAILS TO WIN BACK INVESTORS
The move failed to calm investors as shares in Worldline fell over 6 per cent, hitting a new all-time low on Thursday.
Chief executive Pierre-Antoine Vacheron dismissed concerns that the company, valued 581 million euros as of Wednesday, could become a takeover target despite the new funding.
"We have very strong support from anchor shareholders, which are very large financial institutions in Europe," Vacheron said in a call with reporters. "When you look at the competition, they are not really in good shape."
J.P. Morgan analysts said in a note the new plan gives the firm credibility but that investors will want to see proof of stabilisation.
Worldline, spun off from IT group Atos in 2014, was a standout in France's technology sector before its market value plummeted by about 97 per cent from a 2021 peak of over 20 billion euros.
The company has faced challenges including client retention, repeated profit warnings, governance instability, and a broader slowdown in consumer spending that has impacted the payments industry.
A criminal probe into alleged money laundering at its Belgian unit has further damaged its reputation.
RETURN TO GROWTH EXPECTED FROM 2027
On Thursday, Worldline set longer-term targets of 4 per cent annual revenue growth between 2027 and 2030, 1 billion euros in core earnings, and positive free cash flow as early as 2027.
The French group said 2026 will be a transition year, and it is expecting more pressure on profits and free cash flow.
The planned divestments of its mobility unit, its North American operations, and its electronic data management business will bring in up to 400 million euros in cash proceeds, Worldline said.
($1 = 0.8575 euros)
($1 = 0.7931 Swiss francs)
