* VW will see stake reduced to 7.4 pct from close to 10 pct
* BMW, Susanne Klatten to inject cash to keep their stakes
* SGL a key supplier of carbon fibres to BMW
* Carmakers' uptake of carbon fibres lags expectations
(Recasts, adds details on cash call, percentage shareholdings)
By Ludwig Burger
FRANKFURT, Nov 29 Carmaker Volkswagen
will not buy into a new share issue by SGL
, reducing its stake in the German carbon fibre maker
and allowing rival BMW more control over one of its
key materials suppliers.
BMW and Susanne Klatten, one of the carmaker's largest
shareholders, will participate in the fundraising to maintain
their current shareholdings, while Volkswagen (VW) and
engineering group Voith will not inject cash, SGL said.
VW, which is facing billions in fines and costs in the wake
of a scandal involving rigged emission tests, said in a
statement that providing cash to SGL would "not make sense in
light of the current situation at Volkswagen AG".
VW is, however, not looking to cut its stake further, SGL
SGL, which competes with Japan's Toray and Solvay's
Cytec in carbon fibre materials, will increase its
capital by close to one third, with 40 existing SGL shares
entitling shareholders to buy 13 new shares for 6 euros apiece.
This would result in a reduction of VW's stake to 7.4
percent, down from close to 10 percent at the moment.
SGL said Voith currently holds between 5 and 10 percent,
without being more specific.
BMW and Klatten's investment vehicle Skion will continue to
hold about 18.4 percent and 27.4 percent respectively.
SGL, which has this year sold its struggling graphite
electrodes business, said on Tuesday it would use expected
proceeds from the share sale of 180 million euros, as well as
proceeds of at least 200 million from the graphite electrodes
sale, to cut debt and gain some financial wiggle room.
"We expect to better balance the volatility in our
business," it said in the statement.
The graphite electrodes business, once SGL's largest profit
driver, has been eviscerated by Chinese competition and a slump
in scrap metal recycling, the main use for the electrodes.
Klatten and the carmakers were initially attracted to SGL by
its carbon fibres, used in light-weight components for BMW
electric vehicles as well as VW's Audi R8 sports cars.
While carbon fibre reinforced parts have become standard
materials in aircraft and wind turbine rotors, the auto
industry's uptake has lagged expectations. BMW has recently
limited its use of the costly material, turning to cheaper
aluminium and speciality steel.
SGL shares were down 4 percent to 9.73 euros at 0910 GMT.
(Reporting by Ludwig Burger; Editing by Maria Sheahan and Mark