The board of directors of Avio SpA, meeting on 11 September, unanimously approved the company’s new business plan and resolved to submit to the extraordinary shareholders’ meeting, to be convened for 23 October 2025, a proposal for an increase of share capital, in one or more tranches against cash payment of a maximum aggregate amount of Euro 400 million (including any share premium), by issuing ordinary shares without nominal value, having the same characteristics as those outstanding, to be offered with pre-emptive subscription rights to the Company’s shareholders in proportion to the number of shares held, pursuant to article 2441, paragraph 1, of the Civil Code (the “Capital increase with option”). As customary, it is proposed that the extraordinary meeting grant the board full powers to define the terms and conditions of the capital increase with option, including the issue price, any share premium, the final amount of the capital increase with option and the number of newly issued shares to be offered to shareholders, with the authority to determine the timing of the capital increase with option.

The acceleration of growth opportunities in the space and defense markets in Europe and the United States will require the strengthening of the company’s production capacity, both in Italy and in the United States, together with a more pronounced vertical integration.

In defense, investments in new propulsion technologies and in production assets will combine with Avio’s U.S. development project, focused on the construction on site of a new plant which, operational by the end of 2028, will produce solid propellant motors to serve multiple customers.

In space, Avio, supplier and operator of the Vega launch service, will continue to benefit from market dynamics, which currently forecast an average annual growth rate between 2024 and 2034 (in terms of tonnes launched to orbit) of approximately 10%, by increasing Vega C flight cadence and evolving its launcher platform with Vega E, in addition to supplying motors for the Ariane launchers.

In particular, in defense the opportunity for Avio is to increase its presence in a market accelerating strongly, whose supply chain requires the company’s consolidated know-how in solid rocket motors (Solid Rocket Motor, “SRM”) and the additional production capacity that can be financed with the new capital. In the United States specifically, the company aims to help close the current gap between demand and supply of SRMs by gaining market share in a Total Addressable Market that is currently worth about USD 1.7 billion and is expected to grow at an 8% rate by 2030.

Leveraging the opportunities presented, the new business plan foresees that over the next ten years Avio’s revenue and Ebitda could grow at a compound annual rate of about 10% and over 15%, respectively.

In the context of the capital increase with option, Jefferies and Morgan Stanley, which will act as Joint Global Coordinators and Joint Bookrunners, yesterday entered into a pre-underwriting agreement with industry under which they committed, according to the terms and conditions set out therein and in line with market practice for similar transactions, to enter into an Underwriting Agreement for the subscription of any newly issued shares that remain unsubscribed at the end of the offering period of the capital increase with option. As customary, the Underwriting Agreement relating to the capital increase will be executed, subject to the occurrence of the conditions set forth in the aforementioned pre-underwriting agreement, immediately prior to the launch of the capital increase, as soon as the board of directors has set the final terms.

The capital increase with option is expected to be completed by the end of the year, subject to approval by the extraordinary shareholders’ meeting, market conditions and receipt of the necessary authorizations from the competent authorities.

Avio has also initiated various procedures in the United States to apply at federal and state level for various financing solutions, including non-repayable grants, made available by funds allocated at different levels with the aim of strengthening the country’s industrial base in the defense sector.

The extraordinary shareholders’ meeting will also be asked to renew the delegation of powers to the board of directors, pursuant to article 2443 of the Civil Code, in order to increase the share capital with exclusion of the right of option pursuant to article 2441, fourth paragraph, second part, of the Civil Code, in one or more tranches and against cash payment, up to the limit of 10% of the share capital pre-existing at the time of the delegation (excluding any share premium) as well as up to the limit of 10% of the total number of the company’s shares pre-existing at the time of the exercise of the delegation (the “Reserved capital increase”). In this context, the delegation will allow the board itself to determine the terms of the further capital increase – including the maximum number of newly issued shares and the related subscription price – based on the prevailing market conditions at the time of the actual launch of the operation.

The notice convening the extraordinary shareholders’ meeting will be published in the Investors section of the company’s website and on the storage mechanism “eMarket Storage”, where the board of directors’ explanatory reports relating to the proposals for the capital increase and the reserved capital increase will also be made available to the public, pursuant to article 125‑ter of Legislative Decree no. 58/1998, within the time limits set by law.

In the context of the capital increase with option, Avio is assisted by Chiomenti and Sullivan & Cromwell as legal advisers, while Jefferies and Morgan Stanley are assisted by White & Case as legal counsel.

See for details AVIONEWS 1 and 2.