Commitment
IPO in October 1995
9. October 1995
IPO in October 1995
4 minutes spent reading
 instead. in <b>/data/html/blog/wp-includes/functions.php</b> on line <b>5413</b><br />
https://www.voestalpine.com/blog/wp-content/uploads/2023/02/volkmar_held.jpg)
Volkmar Held
As a freelance writer, Volkmar Held reports for voestalpine on topics that move people. The content of his stories ranges from archaeometallurgy to future technologies.
In 1995 today’s voestalpine AG started out on its path to becoming a privatized and exchange-listed company.
On 9 October 1995, the first day that the former flagship company of nationalized industry in Austria was listed on the stock exchange, the initial offering price of the voestalpine AG (then still called VOEST-ALPINE STAHL AG) share was an amount equal to EUR 5.18
The initial public offering (IPO) was not solely the consequence of the adoption of the ÖIAG Act (Gesetz über Österreichische Industrie AG (ÖIAG)) in December 1993 that stipulated that a number of state-owned companies would gradually be fully or partially privatized. It was also necessary to raise funds on the capital markets which would enable the company to implement ambitious projects.
Extensive preparation
The 50-year anniversary of VOEST-ALPINE in 1995 simultaneously marked the end of its existence as a state-owned enterprise. The company prepared itself for its initial public offering by implementing its own TOP program of cost savings as well as a range of concentration processes. The company also presented itself and its share to the public during a road show in seven countries.
Opinions about the initial public offering
For former CEO Peter Strahammer the stock exchange offered “the ideal preconditions for financing attractive projects in future by issuing shares.” Erhard Koppler, in 1995 former Chairman of the Central Works Council, hoped these projects would also secure jobs over the long term. The banks who accompanied the share issue were primarily concerned with the company’s market position. The investment bank, Bank Austria, who coordinated the IPO, was of the opinion that the VOEST-ALPINE STAHL AG could do well even without subsidies.
October 9, 1995: 11.2 million shares issued
As the lead bank, Bank Austria played a special role in the share issue. They determined the issue price together with the issuer. The result of the so-called book building process was a share price on 9 October 1995 of 285 Austrian schillings (EUR 20.70 in today’s currency). After the 1:4 stock split in 2006, this is the equivalent of EUR 5.18 in today’s terms. The new shareholder structure: ÖIAG: 38.8 %, free float: 38.5 %, VA TECH: 22.7 %.
The 11.2 million shares issued on October 9, 1995 were in great demand, making the IPO one of the most successful in the history of Vienna’s stock exchange.
Two decades ago voestalpine AG started out on its path to becoming a privatized and exchange-listed company. The ‘IPO 1995—20 years on the stock exchange’ series describes key events on the path to becoming an internationally successful steel-based technology and capital goods group.
All IPO blog articles
Exchange
An exchange is a (physical or electronic) marketplace where certain goods, such as commodities, foodstuffs, and precious metals, but also shares or currency are traded. Today, the word is often used synonymously for stock exchange. Some of the most important stock exchanges worldwide today are London, New York, Frankfurt, Shanghai, Hong Kong, and Tokyo.IPO (Initial Public Offering)
An IPO is the first-time offering of a company’s shares on the the publically accessible capital market. These can be both shares that were previously not publicly held (family-owned, government-owned) and traded and primary (new) shares through which the company can raise fresh capital for investments or reduce debt, as proceeds from new shares are recognized in the company and its equity, while loans or bonds are generally recognized as part of borrowed capital, for which interest must be paid and which must be repaid. Issue price
IPO price of a share. It is determined in a multiphase process. Participants are the issuer (the company), the underwriting (issuing) banks, and potential (major) investors. After a comprehensive introduction of the stock (road show) to investors, the issuer and the banks determine a price range (book building), taking feedback from possible investors into consideration. Within a period of time of customarily a few days at the end of the roadshow, during which investors can express their interest in the share (subscription period), the final price is then determined. Road show
A road show represents the information on newly issued shares/bonds. Representatives of the company (issuer) and the underwriting bank visit major financial centers and introduce the company to potential institutional investors. The objective is to convince potential major investors of the attractiveness of a company and its stock (declaration of intent to purchase). Organization of road shows is the responsibility of the Investor Relations Department. Subsequently, roadshows are also organized by many exchange-listed companies when presenting semi-annual or annual results. The Investor Relations Department is responsible for these events. Share
The share is the best known form of certificated ownership in a corporation. The par value of a share corresponds to defined amount of the nominal capital. Profit is distributed on a per-share basis. The amount of equity held by a shareholder also determines the weight of the shareholder’s participation when decisions are made by the Annual General Shareholders’ Meeting.
Volkmar Held