Stabilization and over-allotment option notice
NOT FOR DISTRIBUTION OR RELEASE, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES OF AMERICA AND THE DISTRICT OF COLUMBIA) (THE "UNITED STATES"), AUSTRALIA, CANADA OR JAPAN, OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL.
Oslo, 22 March 2018. Elkem ASA ("Elkem" or the "Company" with OSE ticker code: "ELK"). Reference is made to the stock exchange announcement on 21 March 2018, where the Company announced the successful completion of the bookbuilding process for the initial public offering of shares in Elkem (the "IPO" or the "Offering").
Morgan Stanley & Co. International plc (the "Stabilization Manager") may, on behalf of the Managers (as defined below), engage in stabilization activities from today 22 March 2018 to and including 20 April 2018 (the "Stabilization Period"). Any stabilization transactions will be aimed to support the market price of the Elkem shares.
In connection with the Offering, the Managers have over-allotted to the applicants in the Offering a total of 33,271,551 shares in the Company, which equals approximately 15% of the number of shares issued and sold in the Offering before over-allotments. In order to permit the delivery in respect of over-allotments made, the Selling Shareholder has lent to the Stabilization Manager, on behalf of the Managers, a number of shares in the Company equal to the number of over-allotted shares. For further details on the Offering, see the stock exchange announcement regarding the terms of the Offering, published by Elkem on 12 March 2018.
Further, Bluestar Elkem International Co., Ltd. S.A. (the "Selling Shareholder" or "Bluestar") has granted to the Stabilization Manager, on behalf of the Managers, an over-allotment option to purchase from the Selling Shareholder up to 33,271,551 shares in the Company at a price per share of NOK 29.00, which is equal to the final offer price in the Offering (the "Offer Price"). The over-allotment option may be exercised at any time, in whole or in part, during the Stabilization Period. The Stabilization Manager may close out the short position created by over-allotting shares in the Offering by buying shares in the open market through stabilization activities and/or by exercising the over-allotment option.
The Stabilization Manager (or persons acting on behalf of the Stabilization Manager) may effect transactions to stabilize or maintain the price of the shares of Elkem at a level higher than the level that otherwise might prevail, by buying shares in Elkem or associated instruments in the open market at prices equal to or lower than (but not above) the Offer Price. However, there is no obligation on the Stabilization Manager (or persons acting on behalf of the stabilization manager) to do so. Moreover, there can be no assurance that the Stabilization Manager (or persons acting on behalf of the Stabilization Manager) will undertake stabilization activities. If stabilization activities are undertaken, they may be discontinued at any time, and must be brought to an end upon or before the Stabilization Period expires.
Within one week after the end of the Stabilization Period, the Stabilization Manager will publish an announcement on the Oslo Stock Exchange NewsWeb, under the Company's ticker, with information as to whether or not they have undertaken any stabilization activities, including the total number of shares sold and purchased, the date at which stabilization activities began, the date at which stabilization activities last occurred, the price range in which stabilization was carried out for each of the dates where stabilization transactions were made.
Any stabilization activities will be conducted in accordance with section 3-12 of the Norwegian Securities Trading Act and Commission Regulation (EC) No. 2273/2003 implementing Directive 2003/6/EC of the European Parliament and of the Council regarding buy-back programs and stabilization of financial instruments.
ABG Sundal Collier ASA and Morgan Stanley & Co. International plc are acting as Joint Global Coordinators and Joint Bookrunners, Carnegie AS, Citigroup Global Markets Limited and Nordea Bank AB (publ), filial i Norge are acting as Joint Bookrunners, in connection with the IPO (collectively, the "Managers").
Advokatfirmaet Thommessen AS and Linklaters LLP are acting as legal counsels to Elkem and Bluestar. Advokatfirmaet Schjødt AS and Shearman & Sterling (London) LLP are acting as legal counsels to the Managers.
For further queries, please contact:
Morten Viga, CFO
Tel: +47 416 09 752
Odd-Geir Lyngstad, Head of Investor Relations
Tel: +47 976 72 806
Founded in 1904, Elkem is one of the world's leading suppliers of silicon-based advanced materials with operations throughout the entire value chain from quartz to specialty silicones, as well as attractive market positions in specialty ferrosilicon alloys and carbon materials. Headquartered in Oslo, the company's 27 production sites (including a plant under construction) and extensive network of sales offices and agents around the world ensure proximity to customers and access to attractive end markets. Elkem's over 6,000 skilled employees and significant R&D activities provide a solid basis for further technology-driven growth and optimization. Helge Aasen has been the CEO since 2009.
Bluestar is a leading company in the new chemical materials, basic chemical engineering, animal nutrition and environmental science sectors. It is a subsidiary of China National Chemical Corporation, a state-owned company that is one of China's leading chemical companies.
These materials are not for distribution, directly or indirectly, in or into the United States, Australia, Canada or Japan. These materials do not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in any jurisdiction where such offer or sale would be unlawful and the announcement and the information contained herein are not for distribution or release, directly or indirectly, in or into such jurisdictions.
The shares mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933 (the "Securities Act"), and may not be offered or sold in the United States absent registration or exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There is no intention to register any shares referred to herein in the United States. Any shares sold in the United States will be sold only to qualified institutional buyers (as defined in Rule 144A under the Securities Act) pursuant to Rule 144A or another exemption from registration under the Securities Act.
This communication is directed only at (i) persons who are outside the United Kingdom or (ii) persons who have professional experience in matters relating to investments falling within Article 19(2) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended from time to time (the Order) or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2) of the Order or (iv) certified high net worth individuals and certified and self-certified sophisticated investors as described in Articles 48, 50, and 50A respectively of the Order or (v) persons to whom this communication may otherwise be lawfully communicated (all such persons together being referred to as "relevant persons"). Any investment activity to which this communication relates will only be available to and will only be engaged with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.
This communication is distributed in any member state of the European Economic Area which applies Directive 2003/71/EC (this Directive together with any implementing measures in any member state, the "Prospectus Directive") only to those persons who are qualified investors for the purposes of the Prospectus Directive in such member state, and such other persons as this document may be addressed on legal grounds, and no person that is not a relevant person or qualified investor may act or rely on this document or any of its contents.
This announcement does not constitute a prospectus and nothing herein contains an offering of securities. No one should purchase or subscribe for any securities in the Company, except on the basis of information in any prospectus published by the Company in connection with the potential offering and admission of such securities to trading and official listing on Oslo Børs. Copies of any such offering memorandum will, following publication, be available from the Company's registered office.
The Managers and their affiliates are acting exclusively for the Company and no-one else in connection with the intended offering. They will not regard any other person as their respective clients in relation to the intended offering and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice in relation to the intended offering, the contents of this announcement or any transaction, arrangement or other matter referred to herein.
In connection with the contemplated offering, the Managers and any of their affiliates, acting as investors for their own accounts, may subscribe for or purchase shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such shares and other securities of the Company or related investments in connection with the contemplated offering or otherwise. Accordingly, references in the prospectus, if published, to the shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, such Managers and any of their affiliates acting as investors for their own accounts. The Managers do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations 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 Shares 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; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the “Target Market Assessment”). Notwithstanding the Target Market Assessment, distributors should note that: the price of the Shares may decline and investors could lose all or part of their investment; the 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 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 Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Offering.
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 Shares.
Each distributor is responsible for undertaking its own Target Market Assessment in respect of the Shares and determining appropriate distribution channels.
Matters discussed in this release may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and that can be identified by words such as "believe", "expect", "anticipate", "intends", "estimate", "will", "may", "continue", "should", and similar expressions. The forward-looking statements in this press 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.