SCHEDULE 13D: PIMCO Moves to Take Full Control of Mynaric AG Through Debt-to-Equity Restructuring

Pacific Investment Management Company LLC (PIMCO) is pursuing a restructuring plan for Mynaric AG under German law, which is expected to result in PIMCO becoming the sole beneficial owner and the de-listing of Mynaric's shares.

Summary

• Mynaric AG has initiated a restructuring plan (StaRUG process) with the local court of Munich on February 7, 2025, aiming to restructure its equity and debt.
• Investment funds affiliated with Pacific Investment Management Company LLC (PIMCO), original lenders to Mynaric USA Inc., have transferred their claims to a German SPV and provided new bridge financing to Mynaric AG.
• The loans held by the SPV are anticipated to be converted into new equity through a debt-to-equity swap.
• As part of this process, Mynaric AG's existing share capital will be reduced to zero, and all outstanding Ordinary Shares will be canceled for no value.
• PIMCO expects to become the sole beneficial owner of all new equity upon the conclusion of the StaRUG process.
• This outcome is projected to lead to the de-listing and de-registration of Mynaric's American Depository Shares.
• If the StaRUG process is unsuccessful or not approved by the court, PIMCO may explore alternative strategic transactions, including sales or acquisitions of shares, assets, or businesses, or other business combinations that could also lead to a de-listing.

Sentiment

Score: 1

Explanation: The sentiment is extremely negative for existing public shareholders, as their shares will be canceled for no value. While it provides a path for Mynaric AG's survival under new ownership, the outcome for current investors is a total loss.

Positives

• For PIMCO: The restructuring is expected to result in PIMCO becoming the sole beneficial owner of Mynaric AG, gaining full control.
• For Mynaric AG: The StaRUG process provides a framework for financial stabilization and restructuring of debt and equity, potentially preventing insolvency.

Negatives

• For existing shareholders: All outstanding Ordinary Shares will be canceled for no value, resulting in a complete loss of investment.
• The company's American Depository Shares are expected to be de-listed and de-registered, removing public trading access.

Risks

• The StaRUG process may be unsuccessful or not approved by the court, which could lead to alternative, potentially less favorable, outcomes.
• There is no guarantee that PIMCO will make any alternative proposals, or successfully consummate any proposed transaction if the StaRUG process fails.

Future Outlook

PIMCO anticipates becoming the sole beneficial owner of Mynaric AG's new equity following the StaRUG process, which will lead to the de-listing and de-registration of the company's American Depository Shares. In the event the StaRUG process is unsuccessful, PIMCO intends to explore other strategic alternatives, including corporate transactions, sales or acquisitions, or other business combinations that could also result in a de-listing.

Industry Context

This filing details a specific corporate restructuring event for Mynaric AG, a company operating in the optical communications sector. Such debt-to-equity swaps and restructurings are common mechanisms for companies facing financial distress to reorganize their capital structure and avoid insolvency, often leading to a change in control and de-listing from public exchanges.

Corporate Governance

Legal Proceedings

• Mynaric AG submitted a notification to the local court of Munich (Amtsgericht Munchen) regarding its restructuring plan pursuant to the German Corporate Stabilization and Restructuring Act (StaRUG), which requires court approval.

Related Party Transactions

• Investment funds affiliated with PIMCO, the reporting person, are the original sole lenders to Mynaric USA Inc. and have subsequently made available new bridge financing to the Issuer. These loans are expected to be converted into new equity, leading to PIMCO's sole beneficial ownership.

Stakeholder Impact

• Shareholders: Existing shareholders will lose their entire investment as shares are canceled for no value.
• Pacific Investment Management Company LLC (PIMCO): Expected to gain sole beneficial ownership and control of Mynaric AG.
• Mynaric AG: Undergoes a significant restructuring to stabilize its financial position, potentially avoiding insolvency, but transitioning to private ownership.
• Creditors: Original lenders (PIMCO-affiliated funds) are converting debt to equity, indicating a significant change in their position.

Next Steps

• Conclusion of the StaRUG process, including court approval.
• Implementation of the debt-to-equity swap and cancellation of existing shares.
• De-listing and de-registration of Mynaric AG's American Depository Shares.
• If the StaRUG process fails, PIMCO may explore other strategic alternatives, including corporate transactions or business combinations.

Key Dates

Recommendation

Keywords

Mynaric AG, Pacific Investment Management Company LLC, PIMCO, StaRUG, Restructuring, Debt-to-equity swap, De-listing, Beneficial ownership, Corporate governance, Germany, SEC Schedule 13D