Klett Bildungswertpapier II (Education Bond) in Huge Demand
The emission of the second Ernst Klett AG corporate bond proved to be an outstanding success: The forecast volume of EUR 50 million "Bildungswertpapier II" subscriptions was attained in record time. This indicates that investors continue to bet on solid and innovative companies even in the overall difficult economic climate and that they still see large potential in the education markets of the future.
Klett bond "Bildungswertpapier II" was emitted for sale on June 15, 2009. Now – a mere four weeks later – these securities are already sold out. A total of about 2,700 new investors and numerous holders of the first issue, "Bildungswertpapier I," subscribed to the bond and hence the target volume of EUR 50 million. Ernst Klett AG had reported a similarly positive response to its first corporate bond. Back then, the volume of EUR 30 million had also attained the anticipated volume of EUR 30 million in just a few weeks.
"We are amazed by the huge demand for our Bildungswertpapier II," comments Ernst Klett AG’s Chief Financial Officer Arthur Zimmermann. "In our opinion, the positive response of investors renders proof that a company that is steeped in tradition and is financially solid can enter the capital market at any time – regardless of the overall market situation." The emission of "Bildungswertpapier II" did introduce some special circumstances compared to the first bond. "Potential investors responded even more expeditiously than they had four years ago. Just a few minutes after the release of our second bond, we already heard from the first prospective buyers," reports Zimmermann. "This time, the majority of our investors no longer hail from Baden-Württemberg or even just the southern part of Germany. We received inquiries from all of the country instead. Also, the average subscription amount was about EUR 15,100 – a significant increase compared to back in 2005. This evidences that the investors do have confidence in Klett as a business and that they are investing into education."
One of the reasons that drives investor confidence is very likely also the planned use of the funds generated by the bond. Ernst Klett AG invests a large portion of the money into the expansion of adult and continued education. After all, this business portfolio offers excellent potential. Last year alone, approximately 185,000 students took advantage of the curriculums offered by Klett distance learning schools and distance learning colleges. In cooperation with the Freie Universität Berlin, Klett founded the "DUW - Deutsche Universität für Weiterbildung" (German University for Continued Education) in Berlin as a private public partnership. It will begin to offer classes in the fall of 2009. The establishment of the DUW and the acquisition of the "Forum Institut für Management GmbH" resulted in a further reinforcement and expansion of Ernst Klett AG’s adult and continued education segment. Klett has been enjoying great success in this growth market for more than 10 years.
With its 60 companies at 42 locations in 18 countries, Stuttgart-based Klett Group is Germany’s largest education dedicated enterprise. The portfolio of the Klett Group encompasses everything from traditional text books to state of the art learning aids; from professional literature to the classics. Moreover, the Klett Group has established itself as the leading private provider of educational and continued education services. The companies of the Klett Group employ a workforce of about 2,900 and generated revenues of approx. EUR 439 million in 2008. A family owned stock corporation, Ernst Klett Aktiengesellschaft has been in business since 1897.
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