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OR RELEASE WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF
ANY OF THE SECURITIES DESCRIBED HEREIN.
Borgestad, 7 November 2023: Reference is made to the stock exchange announcement
published by Borgestad ASA (the "Company") on 6 November 2023 regarding a
contemplated private placement of new shares (the "Private Placement").
Private placement and subsequent offering
The Company is pleased to announce that gross proceeds of NOK 250 million have
been placed through the Private Placement. A total of 1,000,000,000 new shares
(the "Offer Shares") will be issued in the Private Placement at a subscription
price per Offer Share of NOK 0.25.
The Private Placement was placed as an accelerated bookbuilding process managed
by Arctic Securities AS and SpareBank 1 Markets AS (the "Managers").
The Private Placement attracted significant interest from both existing
shareholders and new investors.
The following existing shareholders and primary insiders have received
conditional allocation as follows:
o Kontrari AS (represented on the board by Jan Erik Sivertsen): 300,000,000
shares
o SES AS (represented on the board by Helene Steen): 188,295,725 shares
o Dione AS and Ploot Invest AS (represented on the board by Jacob Møller):
38,078,783 shares (Dione AS) and 4,194,600 shares (Ploot Invest AS), in total
42,273,383 shares
o CEO Pål Feen Larsen: 4,800,000 shares
o Jawendel AS (represented on the board by Wenche Kjølås): 4,000,000 shares
o Frode Martinussen, Group CEO of Höganäs Borgestad: 1,000,000 shares
The net proceeds from the Private Placement will be used (i) to repay the
outstanding debt under the Company's bond loan (BOR04) with a principal amount
of approximately NOK 100 million (the "Bond Loan"), by carrying out a full
redemption of the issued bonds at a price equal to 100% of the nominal value,
(ii) to repay EUR 10 million (approximately NOK 120 million) of the group's
investment loan with Pekao S.A. Bank with a principal amount of approximately
EUR 40.4 million (the "Agora Bytom Loan"), in connection with a contemplated
refinancing of such loan, and (iii) for general corporate purposes.
The completion of the Private Placement is subject to (i) the corporate
resolutions required to carry out the Private Placement having been validly
made, including approval by the Company's extraordinary general meeting expected
to be held on or around 28 November 2023 (the "EGM"), (ii) the EGM's approval of
a share capital reduction where the nominal value of the Company's shares is
reduced from NOK 1.00 to NOK 0.25 (the "Share Capital Reduction"), (iii)
registration of the Share Capital Reduction and the share capital increase
pertaining to the Private Placement in the Norwegian Register of Business
Enterprises, (iv) the issuance of the Offer Shares in the VPS, (v) the EGM's
approval of the Subsequent Offering (as defined below), (vi) initial
(non-binding) approval from the Municipal Council of Bjuv for the sale-leaseback
transaction announced through the Company's stock exchange announcement on 27
October 2023, and (vii) the agreement between the Company and the Managers
regarding pre-payment of the proceeds from the Private Placement not having been
terminated (collectively, the "Conditions").
The Private Placement will not be completed if the Conditions are not fulfilled
by 15 December 2023.
Investors who are allocated Offer Shares in the Private Placement undertake to
vote in favour of the Share Capital Reduction, the Private Placement (including
the board of directors' proposed allocation) and the Subsequent Offering at the
EGM.
Conditional allocation of the Offer Shares has been determined by the board of
directors, in consultation with the Managers, following expiry of the
bookbuilding period for the Private Placement.
Information about conditional allocation will be issued by the Managers to the
subscribers who have received conditional allocation on or around 7 November
2023. Final allocation will be resolved by the EGM, and information on final
allocation will be issued by the Managers to the subscribers who have received
conditional allocation on or around 29 November 2023, subject to the fulfilment
of the Conditions. The Offer Shares allocated in the Private Placement are
expected to be delivered on a delivery versus payment ("DvP") basis on or around
30 November 2023, provided that the Conditions, including the registration of
the Offer Shares in the Norwegian Register of Business Enterprises, are
fulfilled. The DvP settlement will be facilitated through a prefunding agreement
entered into between the Company and the Managers. The Offer Shares cannot be
traded on the Oslo Stock Exchange until the share capital increase pertaining to
the Private Placement has been registered in the Norwegian Register of Business
Enterprises and the Prospectus (as defined below) has been published.
The Company will publish a prospectus for the listing of the Offer Shares, as
well as the offer and listing of new shares in connection with the Subsequent
Offering (the "Prospectus"), on or around 4 December 2023. If the Offer Shares
are issued before the Prospectus is published, they will be delivered to
investors under a separate ISIN and will only be tradable on the Oslo Stock
Exchange after the Prospectus has been published.
The board of directors has carefully considered the Private Placement in light
of the equal treatment obligations under the Norwegian Public Limited Companies
Act, the Norwegian Securities Trading Act, the Oslo Stock Exchange's Rule Book
II and the Oslo Stock Exchange's guidelines for equal treatment, and is of the
opinion that the proposed Private Placement is in compliance with these
requirements.
The Bond Loan matures on 8 January 2024, and the board of directors considers it
necessary to complete a capital raise as swiftly as possible to ensure that the
Company can repay the Bond Loan at or prior to maturity. The Company's financial
position will be very serious if such repayment cannot be made.
It is further noted that the Agora Bytom Loan matures on 30 June 2024, but that
the Company has entered into a term sheet with Pekao S.A. Bank, which, among
other things, entails that the maturity date for the loan will be postponed
until 31 December 2028, provided that the Company repays approximately NOK 120
million of the loan, that a final amendment agreement is entered into, and that
certain additional conditions for completion are fulfilled. Therefore, it is
also desirable to carry out the Private Placement to secure capital for such
repayment and thereby an extension of the Agora Bytom Loan.
The need for prompt clarification of whether it will be possible to raise
sufficient equity to repay the Bond Loan at maturity and carry out the partial
repayment of the Agora Bytom Loan makes it, in the board of directors' opinion,
necessary to conduct the capital raise as a private placement rather than a
rights issue. A rights issue would take substantially longer to complete, and
this could significantly impair the Company's options in the period up to the
maturity of the Bond Loan. It was also emphasised that the Private Placement was
based on a public accelerated bookbuilding process and is subject to approval
from the shareholders at the EGM.
The board of directors will propose to the EGM that a Subsequent Offering of up
to 250,000,000 new shares in the Company be carried out, directed at
shareholders in the Company as of 6 November 2023 (as registered in the VPS on 8
November 2023) who (i) were not contacted in the wall crossing phase of the
Private Placement, (ii) were not allocated Offer Shares in the Private
Placement, (iii) are not domiciled in a jurisdiction where such an offer would
be unlawful or, for jurisdictions other than Norway, require any prospectus,
filing, registration or similar action (the "Subsequent Offering"). Such
shareholders will be granted non-transferable subscription rights to subscribe
for and be allocated new shares in the Subsequent Offering. The subscription
price in the Subsequent Offering will be equal to the subscription price in the
Private Placement. Oversubscription will be permitted, but subscription without
subscription rights will not be permitted. The net proceeds from the Subsequent
Offering will be used for general corporate purposes.
The completion of the Subsequent Offering will be subject to the approval of the
EGM, as well as the completion of the Private Placement following the fulfilment
of all the Conditions. Therefore, the Subsequent Offering will also be
conditional upon the completion of the Share Capital Reduction and the initial
approval of the sale-leaseback transaction by the Municipal Council of Bjuv. The
application period for the Subsequent Offering is expected to commence shortly
after the publication of the Prospectus. The Company will issue a separate stock
exchange announcement with further details on the Subsequent Offering.
Against this background, and based on an assessment of the current conditions in
the stock markets, the Company's board of directors has considered the Private
Placement to be in the common interest of the Company and its shareholders. Due
to the structure of the Private Placement, the shareholders' preferential rights
will be waived.
Proposal for share capital reductions and share capital increases
The Company currently holds 8,010 treasury shares that the board of directors
considers it desirable and appropriate to cancel through a share capital
reduction in accordance with the Norwegian Public Limited Companies Act Section
12-1(1) item 2. The board of directors will propose that this share capital
reduction be carried out prior to the Share Capital Reduction mentioned above
and that it is made conditional upon the simultaneous registration of the share
capital increase pertaining to the Private Placement, so that creditor
notification not will be required.
Based on the above, the Company's board of directors has decided to propose to
the EGM that:
(i) the Company's share capital be reduced by NOK 8,010 through deletion of the
Company's treasury shares