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Michelin rights issue plans to raise €1.2 billion

Michelin, the family-controlled tyremaker, announced 28 September it was launching a right issue intended to raise around €1.2 billion.

In a statement, the France-based group said shareholders will be offered two new shares for every 11 existing shares at a preferential rate of €45 per share. It went on to say the money raised would be used to finance growth, enhance the company's credit rating and generally reinforce its financial flexibility.

Non-family head Michel Rollier said: "By raising annual capital expenditure to around €1.6 billion in 2011 and for at least the next four years, we will consolidate our technological leadership, make our global brand even more powerful and ensure that our production facilities in developed countries remain competitive.

"This capital increase will enable the group to implement its accelerated growth plan, creating substantial added value over time."

Shareholders can take up the rights issue from 30 September until 13 October and the new shares will begin trading on 25 October.

Michelin, the world's second-largest tyremaker with revenues of over €16 billion, was founded in 1888 by brothers Edouard and André Michelin. The founding family still owns 27% of the company. 

Edouard's great-grandson, also called Edouard, was the CEO from 1999 until 2006 when he drowned while fishing, Rollier has since led the company. Family member Pierre Michelin is today one of the supervisory board.

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