D. CARNEGIE & CO CONDUCTS RIGHTS ISSUE OF SEK 1,013 million

Not for release, publication or distribution, directly or indirectly, in or into Australia, Hong Kong, Japan, Canada, Singapore, the United States or any other jurisdiction where such distribution of this press release would be subject to legal restrictions.

The board of directors of D. Carnegie & Co AB (publ) (”D. Carnegie & Co” or the “Company”) has resolved on a rights issue of SEK 1,013 million by virtue of the authorization approved by the extraordinary general meeting on 23 February 2018. The rights issue is fully guaranteed by the Company’s largest shareholder Vega Holdco S.à r.l.


In December 2017, D. Carnegie & Co announced the acquisition of 1,420 apartments in the Stockholm region and 749 apartments in Västerås for a total market value of SEK 3,235 million. D. Carnegie & Co sees potential for further investments through the ongoing renovation process in its existing portfolio and, potentially, further acquisitions. In order to appropriately fund these investments the board of directors has resolved on a rights issue on the following terms:

THE RIGHTS ISSUE IN SHORT

  • Class A and class B shares will be issued, with preferential right for the Company’s shareholders to subscribe for new shares of the same class
  • The shareholders in D. Carnegie & Co will be entitled to subscribe for one (1) new share for every seven (7) shares held
  • The subscription price is SEK 90 per share, and the total issue proceeds amount to SEK 1,013 million before transaction costs
  • The record date is 7 March 2018 and the subscription period runs from 9 March 2018 until 23 March 2018 (both dates inclusive) or until such later date as decided by the board of directors
  • The Company’s largest shareholder Vega Holdco S.à r.l. (“Vega Holdco”), representing 56.39 percent of the capital, has undertaken to subscribe for its pro rata share of the rights issue and, furthermore, has undertaken to subscribe for the shares that are not subscribed for in the rights issue
  • Didner & Gerge, representing 3.25 percent of the capital, has expressed its intention to subscribe for its pro rata share of the rights issue
  • Länsförsäkringar Fastighetsfond, representing 5.01 percent of the capital has expressed its intention to utilize all or a larger part of their subscription rights
  • Shareholders who do not participate in the rights issue will have their ownership diluted by approximately 14 percent.

The complete terms of the rights issue and further information regarding D. Carnegie & Co will be presented in the rights issue prospectus, which will be published on or around 7 March 2018.

BACKGROUND AND RATIONALE

D. Carnegie & Co owns and manages residential properties with focus on the greater Stockholm region. Property management is performed in-house in order to provide the highest possible level of service to tenants. As of 31 December 2017, the Company owned a portfolio consisting of 18,058 apartments with an assessed market value of SEK 21.5 billion, primarily located in the rapidly growing greater Stockholm region. The Company invested SEK 1,480 million in its existing properties in 2017, including renovation of apartments, investments in external environments and energy efficiency measures.

In December 2017, D. Carnegie & Co announced the acquisition of 1,420 apartments in the Stockholm region at a market value of SEK 2.47 billion and of 749 apartments in Västerås at a market value of SEK 765 million.

Furthermore, D. Carnegie & Co sees potential to continue the value creating renovation process through investments in its property portfolio and the number of units renovated by the Company each year is expected to remain high. D. Carnegie & Co also sees further potential to continue to increase the size of its property portfolio, including through further acquisitions. The rationale behind the board of directors’ decision to resolve on a rights issue with preferential right for the Company’s shareholders is to enable the aforementioned actions, in combination with the recently signed acquisitions in Stockholm and Västerås.

MAIN TERMS OF THE RIGHTS ISSUE

D. Carnegie & Co’s shareholders have preferential right to subscribe for new shares in the Company in proportion to the shares previously held (primary preferential right). Those who, on the record date of 7 March 2018, are registered as holders of shares of class A in the Company will receive subscription rights entitling to subscribe for one (1) new class A share for each seven (7) class A shares held, while those who, on the record date of 7 March 2018, are registered as holders of shares of Class B in the Company will receive subscription rights entitling to subscribe for one (1) new class B share for each seven (7) class B shares held. To the extent shares are not subscribed with subscription rights, the shareholders are offered to subscribe for shares without subscription rights (subsidiary preferential right), irrespective of share class. Any remaining shares not subscribed for with primary or subsidiary preferential right shall be allotted firstly to others who have applied for subscription and secondly to the guarantor, Vega Holdco.

Assuming the rights issue is fully subscribed, D. Carnegie & Co’s share capital will be increased by appr. SEK 143,409,255, from appr. SEK 1,003,864,915 to appr. SEK 1,147,274,170, through the issuance of 11,254,538 new shares, of which 767,123 class A shares and 10,487,415 class B shares. After the rights issue, assuming it is fully subscribed, the number of shares in D. Carnegie & Co will amount to 90,036,314 shares, of which 6,136,989 class A shares and 83,899,325 class B shares.

Shareholders who do not participate in the rights issue will have their ownership share in D. Carnegie & Co diluted by approximately 14 percent, but will have the opportunity to financially compensate themselves for this dilution by selling their subscription rights. The subscription rights of class B will be traded at Nasdaq Stockholm during the period from and including 9 March up to and including 21 March 2018.

The new shares are issued at a subscription price of SEK 90 per share, and the total issue proceeds amount to SEK 1,013 million before transaction costs. No commission will be charged. Subscription for new shares shall be made during the period from and including 9 March 2018 up to and including 23 March 2018. D. Carnegie & Co’s board of directors has the right to extend the subscription period. Any extension will be announced by D. Carnegie & Co through a press release no later than 23 March 2018.

SHAREHOLDER SUPPORT

The Company’s largest shareholder Vega Holdco, representing 56.39 percent of the capital, has undertaken to subscribe for its pro rata share of the rights issue and has also undertaken to subscribe for the shares that are not subscribed for in the rights issue.

Didner & Gerge Fonder, representing 3.25 per cent of the capital, has expressed its intention to subscribe for its pro rata share of the rights issue. Länsförsäkringar Fastighetsfond, representing 5.01 per cent of the capital, has a positive view of the Company and its ability to continue to grow profitably. Länsförsäkringar Fonder has expressed its intention to utilize all or a larger part of their subscription rights.

INDICATIVE TIMETABLE FOR THE RIGHTS ISSUE

5 Mar 2018 Last day of trading in the class B shares including right to participate in the rights issue
6 Mar 2018 First day of trading in the class B shares excluding right to participate in the rights issue
7 Mar 2018 Record date for the rights issue (shareholders who are registered in the share register on this date will receive subscription rights that entitle to participation in the rights issue)
Around 7 Mar 2018 Publication of the prospectus
9 Mar – 21 Mar 2018  Trading in subscription rights 
9 Mar – 23 Mar 2018 Subscription period
Around 28 Mar 2018 Announcement of the outcome of the rights issue

FINANCIAL AND LEGAL ADVISORS

Swedbank is Global Coordinator and Sole Bookrunner and Mannheimer Swartling is legal advisor to D. Carnegie & Co in connection with the rights issue.

Stockholm, 28 February 2018

D. Carnegie & Co AB (publ)

The board of directors

FOR FURTHER INFORMATION, PLEASE CONTACT:

Svein Erik Lilleland, CEO

Phone: +46 (0) 8 121 317 25 E-mail: sel@dcarnegie.se

Jonas Andersson, CIO & Head of Financing

Phone: +46 (0) 8 121 317 25 E-mail: jonas.andersson@dcarnegie.se

The information was submitted for publication, through the agency of the contact person set out above, at 07:00 a.m. CET on 28 February 2018.

IMPORTANT INFORMATION ON LEI AND NID

As a result of MiFID II/MIFIR, all legal entities and natural persons need a LEI (Legal Entity Identifier) number or NID (National ID or National Client Identifier) code respectively in order to participate in financial transactions from 3 January 2018. A LEI number is a global identification code for legal entities and a NID number is a global identification code for natural persons.

Investors wishing to apply for subscription without rights needs to obtain a LEI in the case of legal entities or find out their NID in the case of natural persons.

Swedbank has the right to disregard the application, without any liability towards the applicant, if a LEI or a NID number (as applicable) is not provided upon application.

A legal entity in need of obtaining a LEI can turn to www.gleif.org/en/about- lei/how-to-get-an-lei-find-lei-issuing-organizations and any one of the LEI suppliers listed there in order to obtain a LEI, and should do so in good time before applying to subscribe without rights, as there is an administrative turnaround time with the LEI supplier.

Natural persons with only Swedish citizenship the NID code will be “SE” followed by the person’s personal identity number (Swedish: “personnummer”). If the natural person has more than one citizenship or a different citizenship than Swedish, the NID may be a different number.

IMPORTANT INFORMATION

The information in this press release does not contain or constitute an offer to acquire, subscribe or otherwise trade in shares, subscription rights or other securities in D. Carnegie & Co AB. Any invitation to the persons entitled to subscribe for shares in D. Carnegie & Co AB is made solely through the prospectus which D. Carnegie & Co AB estimates to publish on or around 7 March 2018.

This press release may not be released, published or distributed, directly or indirectly, in or into Australia, Hong Kong, Japan, Canada, Singapore, the United States or any other jurisdiction where such action is wholly or partially subject to legal restrictions or where such action would require additional prospectuses, registrations or other actions in addition to what follows from Swedish law. Nor may the information in this press release be forwarded, reproduced or disclosed in a manner that contravenes such restrictions or would entail such requirements. Failure to comply with this instruction may result in a violation of applicable securities laws.

No subscription rights, BTAs (interim shares) or new shares have or will be registered under the United States Securities Act of 1933 (“Securities Act”) or securities legislation in any state or other jurisdiction in the United States and may not be offered, subscribed, used, pledged, sold, resold, allotted, delivered or transferred, directly or indirectly, into or within the United States, other than pursuant to an exemption from, or in a transaction that is subject to, the registration requirements of the Securities Act and in accordance with securities laws in relevant state or other jurisdiction in the United States.

This press release may contain forward-looking statements which reflect D. Carnegie & Co AB’s current view on future events and financial and operational development. Words such as “intend”, “expect”, “anticipate”, “may”, “believe”, “plan”, “estimate” and other expressions which imply indications or predictions of future development or trends, and which are not based on historical facts, are intended to identify forward-looking statements. Forward-looking statements inherently involve both known and unknown risks and uncertainties as they depend on future events and circumstances. Forward-looking statements do not guarantee future results or development and the actual outcome could differ materially from the forward-looking statements.

About D. Carnegie & Co

D. Carnegie & Co is a property company focusing on residential properties in the Greater Stockholm region and other growth areas. The company’s business concept is to own property portfolios slated for a gradual renovation of apartments in conjunction with the natural turnover of tenants. This can take place quickly and cost-efficiently thanks to extensive experience from the company's renovation method which, among other things, means that no evacuation needs to take place. In addition to this, the company creates value through the development of building rights in existing portfolios. The market value of the company’s properties amounted to SEK 21,456 million on 31 December 2017. The total rental value amounted to SEK 1,576 million annually on 31 December 2017. The economic occupancy rate is high – vacancies are virtually non-existent. D. Carnegie & Co is listed on Nasdaq Stockholm.

About Us

About D. Carnegie & Co D. Carnegie & Co is a property company focusing on residential properties in the Greater Stockholm region and other growth areas. The company’s business concept is to own property portfolios slated for a gradual renovation of apartments in conjunction with the natural turnover of tenants. This can take place quickly and cost-efficiently thanks to extensive experience from the Bosystem renovation method which, among other things, means that no evacuation needs to take place. In addition to this, the company creates value through the development of building rights in existing portfolios. The market value of the company’s properties amounted to SEK 15,887 million as of September 30 2016. The total annual rental value amounted to SEK 1,366 million as of September 30 2016. The economic occupancy rate is high – vacancies are virtually non-existent. D. Carnegie & Co is listed on Nasdaq Stockholm.

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