NOT FOR DISTRIBUTION OR RELEASE, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, HONG KONG OR JAPAN, OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL
XXL ASA – Private Placement successfully placed
Reference is made to the stock exchange announcement released by XXL ASA (“XXL” or the “Company”) on 21 December 2022 regarding the launch of an underwritten private placement of new shares in the Company to raise gross proceeds of NOK 500 million (the "Private Placement").
The Company hereby announces that it has allocated 135,135,135 new shares (the "Offer Shares") in the Private Placement at a subscription price of NOK 3.70 per Offer Share (the "Offer Price"), raising gross proceeds of NOK 500 million.
DNB Markets, a part of DNB Bank ASA, and Nordea Bank Abp, filial i Norge (jointly, the "Managers") acted as joint bookrunners in connection with the Private Placement.
The net proceeds from the Private Placement will be used to repay debt outstanding under the Company's loan facilities and thereby satisfy the new equity condition under the waiver agreement entered into with the Company's bank consortium regarding certain financial covenants.
Settlement of the Private Placement will be divided into two tranches. The first tranche, consisting of 37,503,142 Offer Shares, will be settled on or about 19 January 2023 on a delivery-versus-payment basis ("DVP") with listed shares facilitated by a pre-funding agreement expected to be entered into between the Company and the Managers. Offer Shares allocated to (i) Altor Invest 5 AS and Altor Invest 6 AS (together, “Altor”), (ii) Dolphin Management AS, (iii) 7,270,270 of the Offer Shares allocated to Ferd AS and (iv) 7,273,515 of the Offer Shares allocated to Odin Forvaltning AS will be settled in the second tranche, and the remaining Offer Shares will be settled in the first tranche.
The second tranche, consisting of 97,631,993 Offer Shares, will be settled on or about 8 March 2023 following the publication by the Company of a prospectus relating to listing of Offer Shares and, if relevant, the offering of shares in the Subsequent Offering (the "Prospectus").
The following close associates to primary insiders were allocated Offer Shares in the Private Placement:
- Altor Invest 5 AS, a close associate of board member Tom Christian Jovik, was allocated 33,435,995 Offer Shares and will upon issuance of these shares own 63,495,476 shares (16.4%) in the Company;
- Altor Invest 6 AS, a close associate of board member Tom Christian Jovik, was allocated 33,435,996 Offer Shares and will upon issuance of these shares own 63,495,479 shares (16.4%) in the Company;
- Dolphin Management AS, a close associate of board member Øivind Lønnestad Tidemandsen, was allocated 13,513,514 Offer Shares and will upon issuance of these shares own 48,013,514 shares (12.4%) in the Company; and
- Funkybiz AS, a close associate of chairperson Hugo Lund Maurstad, was allocated 2,702,703 Offer Shares and will upon issuance of these shares own 5,302,703 shares (1.4%) in the Company.
Completion of the Private Placement by delivery of Offer Shares to investors is subject to (i) the EGM resolving the share capital increases pertaining to the issuance of the Offer Shares and, as further described below, authorizing the Board to resolve the Subsequent Offering (together, the "EGM Resolutions"), and (ii) registration of the share capital increases pertaining to the issuance of the Offer Shares in the relevant tranche with the Norwegian Register of Business Enterprises and the registration of those Offer Shares in the Norwegian Central Securities Depository ("VPS").
The shareholders who are parties to the UWA, being Altor, Dolphin Management AS, Arctic AM and Funkybiz AS, and investors who have been allocated shares in the Private Placement, have undertaken to vote in favour of the EGM Resolutions.
The Company has, subject to completion of the Private Placement, and certain other conditions, resolved to carry out a subsequent offering of up to 27,027,027 new shares at the Offer Price (the "Subsequent Offering") which, subject to applicable securities law, which will be directed towards certain shareholders not allocated shares in the Private Placement as detailed below. The subscription price in the Subsequent Offering will be equal to the Subscription Price in the Private Placement. Shareholders of the Company as of close of trading on 21 December 2022, as recorded in the VPS on 23 December 2022, who were not allocated shares in the Private Placement, and who are not resident in a jurisdiction where such offering would be unlawful, or would (in jurisdictions other than Norway) require any prospectus filing, registration or similar action (“Eligible Shareholders”), will receive subscription rights in the Subsequent Offering.
The Subsequent Offering will, inter alia, be conditional upon (i) completion of the Private Placement, (ii) the EGM Resolutions, (iii) the trading price of the Company's shares exceeding the subscription price, and (iv) approval and publication of the Prospectus.
The subscription period for the Subsequent Offering is expected to commence in the first half of March 2023 following approval and publication of the Prospectus.
The net proceeds from the Subsequent Offering will be applied for general corporate purposes.
EQUAL TREATMENT COONSIDERATIONS
The Private Placement represents a deviation from the shareholders' pre-emptive right to subscribe for and be allocated the Offer Shares. The Board has considered the structure of the equity raise in light of the equal treatment obligations under the Norwegian Public Limited Companies Act, the Norwegian Securities Trading Act, the rules on equal treatment under Oslo Rule Book II for companies listed on the Oslo Stock Exchange and the Oslo Stock Exchange's Guidelines on the rule of equal treatment, and the Board is of the opinion that the transaction structure is in compliance with these requirements.
The share issuance was carried out as a private placement in order for the Company to complete the equity raise in a manner that is efficient and closely coordinated with the waiver process with its lending banks. Certainty of at least NOK 500 million in new equity is a condition under the waiver agreement with the lending banks, and that certainty has been provided by the pre-commitments and underwriting of the Private Placement. With regards to timing of the transaction the Company found it beneficial to execute prior to year-end in order for the Company's debt not to be reclassified to short term debt. The subscription price was set on the basis of a publicly announced bookbuilding process and thus reflected the market pricing of the shares, with a minimum price of NOK 3.70 to protect the Company's shareholders against unexpected results resulting in high dilution.
Further, the Subsequent Offering, if implemented, will secure that Eligible Shareholders will receive the opportunity to subscribe for new shares at the same subscription price as that applied in the Private Placement.
Based on overall where inter alia the above factors and the current weak retail market and equity capital markets, the Board has considered the proposed transaction structure to be in the common interest of the Company and its shareholders.
DNB Markets, a part of DNB Bank ASA, and Nordea Bank Abp, filial i Norge act as managers for the Private Placement and the Subsequent Offering. Advokatfirmaet Thommessen AS is acting as legal advisor to XXL in relation to the Private Placement and the Subsequent Offering.
For further queries, please contact:
Tolle O. R. Grøterud
Tel: +47 90 27 29 59
Tel: + 47 952 11 779
This information is considered to be inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. This stock exchange announcement was published by Tolle O. R. Grøterud, Investor Relations Officer at XXL ASA, on 22 December 2022 at 00:05 CET.
Allocation of Offer Shares in the Private Placement to close associates to primary insiders is disclosed pursuant to the Market Abuse Regulation Article 19. Further details of the allocations of Offer Shares to primary insiders are available in the attached forms. This disclosure also is made pursuant to section 4-2 (3) of the Norwegian Securities Trading Act.
ABOUT XXL ASA
XXL is a leading sports retailer with stores and e-commerce in Norway, Sweden, Finland, Denmark and Austria. It is the largest among the major sports retailers in the Nordics. XXL pursues a broad customer appeal, offering a one stop shop experience with a wide range of products for sports, hunting, skiing, biking and other outdoor activities. XXL’s concept is to have the largest stores with the best prices and the widest assortment of products, focusing on branded goods.
These materials do not constitute or form a part of any offer of securities for sale or a solicitation of an offer to purchase securities of the Company in the United States or any other jurisdiction. The securities of the Company 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 (the "U.S. Securities Act"). The securities of the Company have not been, and will not be, registered under the U.S. Securities Act. Any sale in the United States of the securities mentioned in this communication will be made solely to "qualified institutional buyers" as defined in Rule 144A under the U.S. Securities Act. No public offering of the securities will be made in the United States.
In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the EU Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The expression "EU Prospectus Regulation" means Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 (together with any applicable implementing measures in any Member State).
In the United Kingdom, this communication is only addressed to and is only directed at Qualified Investors who (i) are investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order") or (ii) are persons falling within Article 49(2)(a) to (d) of the Order (high net worth companies, unincorporated associations, etc.) (all such persons together being referred to as "Relevant Persons"). These materials are directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this announcement relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.
Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended (“MiFID II”); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the “MiFID II Product Governance Requirements”), and disclaiming all and any liability, which any “manufacturer” (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Company’s shares in have been subject to a product approval process, which has determined that they each are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II (the “Positive Target Market”); and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II. Distributors should note that: the price of the Company’s shares may decline and investors could lose all or part of their investment; the Company’s shares offer no guaranteed income and no capital protection; and an investment in the shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. Conversely, an investment in the Company’s shares is not compatible with investors looking for full capital protection or full repayment of the amount invested or having no risk tolerance, or investors requiring a fully guaranteed income or fully predictable return profile (the “Negative Target Market” and, together with the Positive Target Market, the “Target Market Assessment”).
The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Transaction. For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Company's shares. Each distributor is responsible for undertaking its own Target Market Assessment in respect of the Company's shares and determining appropriate distribution channels.
Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "anticipate", "believe", "continue", "estimate", "expect", "intends", "may", "should", "will" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice.
This announcement is made by and, and is the responsibility of, the Company. The Managers are acting exclusively for the Company and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, or for advice in relation to the contents of this announcement or any of the matters referred to herein.
Neither the Managers nor any of their respective affiliates makes any representation as to the accuracy or completeness of this announcement and none of them accepts any responsibility for the contents of this announcement or any matters referred to herein.
This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities of the Company. Neither the Managers nor any of their respective affiliates accepts any liability arising from the use of this announcement.
The distribution of this announcement and other information may be restricted by law in certain jurisdictions. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.