On Tuesday, Xilam Animation announced plans for a capital increase, sending the animation specialist's share price plummeting.

The capital increase, with preferential subscription rights maintained, will be carried out via the issue of new shares representing less than 20% of the capital, i.e. a maximum of 982,299 new shares, for a maximum amount of six million euros.299 new shares, for a maximum amount of six million euros.

The group plans to use the funds to optimize its financial structure by rebalancing its balance sheet and improving its debt ratio, against a backdrop of rising debt costs, it explains in a press release.

Xilam recalls that it redeemed a 15 million euro 'EuroPP' bond loan last July.

The creator of 'Oggy et les cafards' and 'Zig & Sharko' points out that its capital increase remains subject to obtaining a waiver from the AMF from the obligation to file a draft public offer.

'After the collapse of its share price (-90% since August 2022), Xilam Animation is now capitalized at just 21 million euros', analysts at Invest Securities pointed out this morning.

Unless there is a +50% premium on the share price, the deal is likely to be worth four million euros rather than six million', deduced the brokerage firm.

Listed on the Paris Bourse, Xilam shares lost over 7% on Tuesday morning following these announcements.

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