Dutch navigation device maker TomTom NV plans to sell new shares to raise 430 million ($595 million) to pay off some of its heavy debt burden.
In a statement late Sunday, TomTom CEO Harold Goddijn said the share offering "provides us with a substantially strengthened balance sheet."
By Monday afternoon in Europe, TomTom shares had dropped more than 7 percent to 6.92 ($9.58).
In April, TomTom reported a 37 million first-quarter loss, as sales fell amid the economic downturn and the company's debt weighed on the bottom line. At the time, TomTom's net debt was 1.16 billion, up 50 million from year end.
The debt stems from TomTom's 2.9 billion acquisition of digital map maker Tele Atlas, a purchase made last year after a takeover battle with major rival Garmin Ltd. of the Cayman Islands.
TomTom said Dutch investment group Cyrte and Janivo, an investment manager that had a stake in Tele Atlas when it was founded, would together buy stock worth 100 million ($138.5 million) in the new share issue.
