Savo-Solar Ltd.
Company Announcement 17 November 2015 at 9.50 am (CET)
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The Board of Directors of Savo-Solar Ltd ("Savo-Solar" or the "Company") is expected to resolve on a rights issue (the "Offering") on 20 November 2015. The Offering is expected to consist of a maximum of 10,591,620 new class A shares (the "Offer Shares"). The Offer Shares would constitute up to 66.67% of all shares in the Company should the Offering be fully subscribed.
Summary of the Offering
Jari Varjotie, Managing Director:
"The Company's order backlog did not develop as planned after the IPO in April 2015, mainly due to the slower than expected start of major projects pursued in Denmark. However, during recent months the Company has signed orders to the value of EUR 3 million and expects the trend to continue. At the same time the Company has achieved significant improvements in its competitiveness by further developing its product. The improvements include both cost savings and improved and excellent efficiency values.
Enquiries for tenders for large projects have considerably increased. In Denmark, the Company has been invited to five tenders after the summer season, and approximately five more can be expected before year-end. In addition, the Company has gained a lot of interest also outside the Danish market. The Company has received enquiries for example from Germany, Austria, the Middle East and China. In the next few months the Company is pursuing at least two orders to be delivered in 2016, with order values of approximately EUR 1-3 million."
Reasons for the Offering and use of proceeds
Savo-Solar produces the internationally award-winning solar thermal absorbers and collectors, of which the 2 m2 collectors with MPE absorbers are, according to the information available to the Company's management, the most efficient in the world. Savo-Solar started to deliver its products in June 2011 and has since delivered nearly 20,000 square metres of absorbers and collectors to several resellers, agents or end customers in 17 countries on four continents. During the summer and autumn of 2014, Savo-Solar signed its first agreements for the delivery of a large solar thermal collector field to Denmark, with a total value of approximately three times the Company's revenue in 2013. During the summer of 2015, the Company signed a third agreement with Løgumkloster Fjernvarme concerning the delivery of a collector field comprising approximately 5,500 square metres and worth approximately EUR 1.0 million. Furthermore, the Company won a tender for the delivery of a solar thermal collector field of approximately 15,000 square metres to Jelling Varmevaerk. The agreement concerning this delivery was signed in August 2015, and its value is approximately EUR 2.0 million. According to the current estimate, the final confirmation of this agreement will be given in November 2015, once Jelling Varmevaerk has obtained the final approval for the zoning change from the Jelling municipality zoning board.
The Company's order backlog did not develop as planned after the IPO in April 2015, mainly because the start of the major projects pursued in Denmark took longer than expected. For this reason, the Company had to cut its revenue forecast for the financial year 2015 from EUR 4.0 million to 2.0-2.5 million on 23 June 2015. Due to the lowered revenue forecast and because the first project generated more costs than expected, the Company has decided to arrange the Offering to secure its short-term working capital needs.
The Company aims to raise approximately EUR 4.2 million through the Offering. The Company expects to receive net proceeds of approximately EUR 3.9 million from the Offering, after deducting the estimated expenses related to the Offering payable by the Company of approximately 0.3 million.
The Company will use the net proceeds from the Offering i) to secure its working capital needs in order to deliver the signed and upcoming orders in 2015-2016, and ii) on capacity-increasing investments to improve production efficiency and promote further product development. In order to secure the delivery of the signed and upcoming orders in 2015-2016, approximately EUR 2.4 million of working capital shall be reserved from the proceeds of the Offering for the upcoming 12 months. The estimated costs of the investments required for the increase of production capacity and efficiency in 2015 and 2016 will be approximately EUR 1.5 million.
The Offering
On 19 December 2014, the extraordinary general meeting resolved that the Board of Directors is authorised to, in one or more transactions, against or without consideration, decide on the issuance of shares and the issuance of options and other special rights entitling to shares referred to in Chapter 10 Section 1 of the Finnish Companies Act. The number of shares to be issued based on the authorisation amount to a maximum of 20,000,000 class A shares and 20,000,000 class B shares. The Board of Directors decides on all the terms and conditions of the issuances of shares, options and other special rights entitling to shares. The authorisation is valid until 30 June 2016.
Based on the said authorisation, the Board of Directors of the Company is planning to offer up to 10,591,620 new class A shares in the Company for subscription in accordance with the shareholders' preferential subscription right.
Savo-Solar is planning to give all shareholders registered in Savo-Solar's shareholder register maintained by Euroclear Finland or Euroclear Sweden two (2) book-entry Subscription Rights per each share held in the Company on the Offering record date, which is approximately 24 November 2015. Each (1) Subscription Right entitles its holder to subscribe for one (1) Offer Share. The Subscription Rights are expected to be registered in shareholders' book-entry accounts in the book-entry system maintained by Euroclear Finland approximately on 24 November 2015 and in the book-entry system maintained by Euroclear Sweden approximately on 26 November 2015. The Subscription Rights can be freely assigned and they are expected to be traded on First North Finland and First North Sweden between 27 November 2015 and 9 December 2015.
After the subscription, temporary shares corresponding to the Offer Shares subscribed for based on the Subscription Rights (the "Temporary Shares") will be entered into the subscriber's book-entry account. The Offer Shares will be entered in the subscriber's book-entry account once they have been entered into the trade register, approximately during week 52, 2015. Trading in the Temporary Shares will commence on First North Finland and on First North Sweden as their own special share class approximately on 27 November 2015. The Temporary Shares will be combined with the Company's current class A shares after the Offer Shares have been registered into the trade register. The combination will take place approximately during week 52, 2015, and the Offer Shares will be subject to trading together with the Company's existing shares approximately during week 52, 2015 on First North Finland and during week 53, 2015 on First North Sweden.
In addition, Savo-Solar is planning to offer each subscriber of the Offer Shares one (1) Warrant free of charge for every four (4) Offer Shares subscribed and paid for in the Offering, the subscription of which the Board of Directors has approved. Each Warrant would entitle its holder to subscribe for one (1) new class A share in the Company for a subscription price of EUR 1.00 per share during the subscription period of 5 October 2016 - 21 October 2016. The maximum number of Warrants would be 2,647,905 if the Offering was fully subscribed. Fractions of the Warrants will not be issued. The Warrants can be freely assigned.
The Company intends to apply for the listing of the Warrants on First North Sweden and First North Finland. If the listing of the Warrants occurs, the Company expects trading to commence on First North Sweden and on First North Finland approximately during week 1, 2016.
Subscription locations of the Offering
The subscription locations of the Offering are as follows:
a) FIM Sijoituspalvelut Oy, premises at Pohjoisesplanadi 33 A, 00100 Helsinki, Finland (asiakaspalvelu@fim.com, tel.: +358 9 6134 6250) and
b) Mangold Fondkommission AB's website at www.mangold.se and Mangold Fondkommission AB's premises at Engelbrektsplan 2, 102 51 Stockholm, Sweden (emissioner@mangold.se, tel.: +46 8-503 01 580).
Prospectus
Savo-Solar will prepare a prospectus relating to the Offering. The official Finnish language version of the prospectus as well as its unofficial English language translation, including a Swedish summary, will be available at Savo-Solar's website (www.savosolar.fi/Rights_Issue_2015), Mangold Fondkommission AB's website (www.mangold.se) and FIM Sijoituspalvelut Oy's website (www.fim.com) approximately as per 20 November 2015.
Preliminary timetable for the Offering
| 20 November 2015 | Resolution regarding the Offering by the Board of Directors |
| 20 November 2015 | The prospectus is published |
| 20 November 2015 | Last day of trading including the Subscription Rights |
| 21 November 2015 | First day of trading excluding the Subscription Rights |
| 24 November 2015 | Record date for the Offering |
| 27 November - 9 December 2015 27 November 2015 | Trading period for the Subscription Rights Trading in the Temporary Shares begins |
| 27 November - 11 December 2015 | The Subscription Period for the Offering in Sweden |
| 27 November - 15 December 2015 | The Subscription Period for the Offering in Finland |
| 17 December 2015 | Announcement of outcome of the Offering |
| Week 52, 2015 | Last day of trading in the Temporary Shares on First North Finland |
| Week 53, 2015 | Last day of trading in the Temporary Shares on First North Sweden |
| Week 1, 2016 | Trading in the Warrants begins on First North Finland |
| Week 1, 2016 | Trading in the Warrants begins on First North Sweden |
| 5 October - 21 October 2016 | The subscription period of shares with the Warrants |
Advisers
Mangold Fondkommission AB is acting as financial adviser of the Company in the Offering. Smartius Oy is acting as the legal adviser of the Company on aspects of the Offering related to the Finnish law and Advokatfirman Westermark Anjou AB on aspects of the Offering related to the Swedish law.
For more information:
Ingrid Östhols, communication
Phone: +46 721 810 867
E-Mail: ingrid.osthols@savosolar.se
Savo-Solar Ltd
Managing Director Jari Varjotie
Phone: +358 400 419 734
E-mail: jari.varjotie@savosolar.fi
Savo-Solar in brief
Savo-Solar provides solar thermal systems for heating of buildings, industrial processes and domestic hot water. Savo-Solar's systems are based on the verified world's most efficient 2 m2 collector utilizing MPE-absorbers with several patents pending. The absorbers are coated with a highly selective optical nano-coating. Savo-Solar is, according to the available information, the only company able to coat ready-made, complete absorbers. Focus is on large scale industrial applications such as district heating, industrial process heating and energy renovations of large buildings. Since 2011 the company has sold and delivered its products in over 17 countries on four continents. Savo-Solar's shares are listed on Nasdaq First North Sweden with the ticker SAVOS and on Nasdaq First North Finland with the ticker SAVOH. www.savosolar.fi.
The Company's Certified Adviser is Mangold Fondkommission AB, tel.: +46 8 5030 1550.
IMPORTANT NOTICE
This release or the information contained therein shall not be distributed, directly or indirectly, in Australia, Canada, Hong Kong, Japan, New Zealand, South Africa or the United States. The information contained in this release do not constitute an offer of, or invitation to purchase any securities in any area, where offering, procurement of or selling such securities would be unlawful prior to registration or exemption from registration or any other approval required by the securities regulation in such area. This release is not an offer for sale of securities in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended, and the rules and regulations issued by virtue of it. Savo-Solar has not registered, and does not intend to register, any offering of securities in the United States. No actions have been taken to register the shares or the offering anywhere else than in Finland and Sweden.
The information contained herein shall not constitute an offer of, or invitation to purchase any securities in any jurisdiction. This release is not a prospectus and does not constitute any offer, invitation or investment advice to subscribe for or purchase securities. Investors should not subscribe for or purchase any securities or make any investment decisions referred to herein except on the basis of information contained in a prospectus issued by Savo-Solar.