In our view, the raise, consisting of a rights issue of up to approximately 109 MSEK and a convertible loan agreement of 35 MSEK, lowers short-term financing risks by securing working capital needs for ongoing customer projects and enabling the repayment of temporary project financing. The parameters of the capital raise, particularly the steep discount with a subscription price of SEK 0.20 per share, result in higher dilution than we had anticipated, which puts downward pressure on our per-share valuation. We expect to address this in more detail in the near future with an updated valuation assessment. However, the high share of guaranteed commitments should help make the raise successful, providing the company with the necessary runway to execute its order backlog and convert its sales pipeline.

Capital raise of up to 144 MSEK

Metacon announced on Tuesday a capital raise of up to approximately 144 MSEK before transaction costs. The raise consists of a rights issue of approximately 109 MSEK and a convertible loan agreement of 35 MSEK to Fenja Capital II A/S. The rights issue is directed towards existing shareholders, who will receive one subscription right for each share held on the record date of 10 June 2026. Five subscription rights entitle the holder to subscribe for two new shares at a subscription price of SEK 0.20 per share. If fully subscribed, the number of outstanding shares will increase from 1,364 million to 1,909 million. Shareholders who do not participate will experience a dilution of up to ~28.6% but can financially compensate for this by selling their subscription rights. In our view, the discount is steep, but not surprising given Metacon's need to attract external financing while order intake visibility remains the key uncertainty.

The rights issue is covered by subscription commitments from the Board of Directors and management of approximately 2.4 MSEK, or 2.2% of the issue. In addition, Pareto Securities has provided a guarantee undertaking of 75.0 MSEK (~68.8%), bringing the total secured amount to approximately 77.4 MSEK or 71.0% of the rights issue. We note that the guarantee is expensive, with an 8% fee (~6 MSEK), and that Pareto holds a put option allowing it to sell guarantee-subscribed shares to Fenja at the issue price, which effectively channels unsubscribed stock toward Fenja.

Alongside the rights issue, Metacon has taken a 35 MSEK convertible loan from Fenja, the same lender behind the expensive January bridge financing. The loan matures 30 November 2027 and carries interest of STIBOR 3M (floored at 2%) plus a 9% margin, i.e. at least ~11% annually, plus a 1.75 MSEK arrangement fee. Fenja can convert at SEK 0.20 per share (in line with the issue price) if it chooses to do so within ten banking days of registration. Any unconverted balance reverts to a higher SEK 0.25 per share conversion price. Full conversion of the 35 MSEK would add a further 175m shares, taking total dilution for non-participants to ~34.6%.

Fenja additionally receives warrants free of charge equal to 3% of post-issue shares, struck at 140% of the issue price (SEK 0.28) and exercisable to 31 May 2031. In our view, the all-in cost of the Fenja package is again high, consistent with our prior view that Metacon's large-project, working-capital-intensive model requires costly external funding while the company waits on milestone payments.

Securing working capital for project execution, but dilution is the price

Strategically, we believe that the raise is a logical and arguably necessary step. Use of proceeds is prioritized as ~45% to repay the temporary project financing taken in January (the costly Fenja bridge), ~35% to project execution and delivery capability, and ~20% to commercial expansion in electrolysis, including new geographies such as South America. In our view, clearing the expensive January debt and securing working capital removes a near-term liquidity risk that had been weighing on the equity story. We also believe that management defending its ownership by subscribing is a modest positive signal. In addition, following the rights issue we believe Metacon strengthens its ability to execute its current order backlog and is better placed to convert its growing sales pipeline into firm orders. All in all, the capital raise was largely anticipated from our side. We have previously highlighted that Metacon's project-driven business model requires substantial working capital and expected the company to seek additional financing. In our previous update, we had modeled an equity issue of 150 MSEK in 2026 at a higher subscription price of 0.24 SEK per share. While the total raised amount is somewhat smaller than our previous assumption, the steeper discount results in greater dilution, which has a negative impact on the per-share valuation. We will provide a more detailed assessment of the impact on our valuation in a forthcoming update.