STARK Terminates Deal with “LEONI” upon Revelation of Recent Negative Factors

Stark Corporation Public Company Limited (SET: STARK) announced on December 13, 2022, that the Extraordinary General Meeting of Shareholders No. 1/2022 via electronic devices, which was held on September 23, 2022, resolved to approve the acquisition of shares in LEONI AG and LEONI Bordnetz-Systeme GmbH (the “SPA”) with respect to the proposed acquisition of 100 percent shares in LEONI Kabel GmbH, a limited liability company registered under the laws of Germany and LEONIsche Holding Inc, a Delaware corporation registered under the laws of Delaware (collectively, the “Target Companies”), having total purchase value of up to EUR 560 million (or approximately not higher than THB 20,572.89 million) and certain intercompany financing receivables.

However, the Board of Directors Meeting No. 8/2022, held on 13 December 2022 considered that there have been several events and adverse changes, as well as new information which differed from the time the company entered into the transaction. Such events, adverse changes and new information have resulted in a material negative financial impact on the Target Companies’ business as a whole and have impacted the viability of the transaction which could not have been anticipated at the time when the SPA was signed. 

STARK stated that it therefore has decided to exercise its rights under the SPA and by law to withdraw from the SPA and the transaction. The board of directors has determined that the company’s purpose and plan of use of proceeds from the capital increase must be changed or expanded since the purpose and plan of use of proceeds from the capital increase are limited and there were various events that differed from the date that the Company has requested approval from the shareholders meeting due to external factors that the company could not control. The best way to avoid the loss of opportunities to use the capital increase to add value and maximize benefits for the Company and shareholders is to change or expand the purpose and plan of use of proceeds from capital increase so that the company can use capital increase for purposes other than those approved by the shareholders meeting as necessary and appropriate.

After the announcement of the deal in September, STARK said the company would recognize a revenue from new business in Power Cable product group for vehicle and EV Charging Solution, the biggest of the world of LEONI, from December 2022 onward, and that the revenue will reach THB 8 billion in 2023.