HKScan issues EUR 40 million hybrid bond

NOT FOR PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES OR TO ANY U.S. PERSON, OR IN OR INTO ANY OTHER JURISDICTION WHERE PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

HKScan Corporation, Stock Exchange Release, 10 September 2018 at 19.15 Finnish time (EEST).

HKScan Corporation ("HKScan") issues a EUR 40 million hybrid bond. The coupon of the hybrid bond is 8.00 per cent per annum, but it will be subject to a coupon reset on each fifth anniversary of the issue date of the hybrid bond. The hybrid bond does not have a specified maturity date but HKScan is entitled to redeem the hybrid bond for the first time on the fifth anniversary of the issue date, and subsequently, on each annual coupon interest payment date. The issue date is expected to be 17 September 2018.

The hybrid bond issuance will strengthen HKScan's capital structure and financial position. The net proceeds of the issuance will be used for general corporate purposes.

“We are pleased with the positive level of investor demand for our hybrid bond and would like to thank our investors for their confidence in HKScan's strategy. The hybrid bond transaction strengthens our capital structure and provides valuable support to our strategy implementation in our company's turnaround phase”, says Mikko Forsell, CFO of HKScan. 

A hybrid bond is an instrument that is subordinated to certain other debt obligations and is treated as equity in HKScan's consolidated financial statements prepared in accordance with IFRS. A hybrid bond does not confer its holder the rights of a shareholder nor does it dilute the holdings of the current shareholders.

A key information document relating to the hybrid bond, prepared in accordance with the PRIIPs Regulation (Regulation 2014/1286/EU, as amended), will be revised to include final pricing information and made available on HKScan's website at www.hkscan.com/en/investors-information as soon as possible.

Nordea Bank AB (publ) acts as the Lead Manager for the hybrid bond issue.

Krogerus Attorneys Ltd acts as legal counsel to HKScan in the hybrid bond issue.

HKScan Corporation

Jari Latvanen

President and CEO

Further information: HKScan Corporation's CFO Mikko Forsell or VP Group Treasury & IR Keijo Keränen. Please submit a call-back request via the Group media desk +358 (0)10 570 5700 or email: communications@hkscan.com.

HKScan is a Nordic meat and meals company. We employ over 7 300 professionals in striving to serve the world's most demanding consumers, maintaining quality throughout the full chain of operations, From Farm to Fork. HKScan produces, markets and sells high-quality, sustainably produced pork, beef, poultry and lamb products, as well as charcuterie and meals, with strong consumer brands, including HK®, Scan®, Rakvere®, Kariniemen®, Rose®, Pärsons® and Tallegg®. Our customers are the retail, food service, industrial and export sectors, and our home market comprises of Finland, Sweden, Denmark and the Baltics. We export to close to 50 countries. In 2017, HKScan had net sales of EUR 1.8 billion, making us one of Europe’s leading meat and meals companies.

Important information

MiFID II product governance / Retail clients, professional clients and eligible counterparties target market

Solely for the purposes of the product governance requirements set forth in Directive 2014/65/EU (as amended, "MiFID II"), the target market assessment made by the manufacturer in respect of the hybrid bond has led to the conclusion that: (i) the target market for the hybrid bond is eligible counterparties, professional clients and retail clients, each as defined in MiFID II; (ii) the negative target market for the hybrid bond is clients that seek full capital protection or full repayment of the amount invested, are fully risk averse/have no risk tolerance or need a fully guaranteed income or fully predictable return profile; (iii) all channels for distribution of the hybrid bond to eligible counterparties and professional clients are appropriate; and (iv) the following channels for distribution of the hybrid bond to retail clients are appropriate: investment advice, portfolio management, and non-advised sales or execution with appropriateness test, subject to the distributor's (as defined below) suitability and appropriateness obligations under MiFID II, as applicable. Any person subsequently offering, selling or recommending the hybrid bond (a "distributor") should take into consideration the manufacturer's target market assessment. However, a distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the hybrid bond (by either adopting or refining the manufacturer's target market assessment) and determining appropriate distribution channels. The Lead Manager is the manufacturer of the hybrid bond for the purposes of MiFID II product governance rules.

Notice to prospective investors in the European Economic Area (including Finland)

This announcement has been prepared on the basis that any offers of the hybrid bond in the EEA, if and when made, will be made pursuant to an exemption under the Directive 2003/71/EC (as amended) (the "Prospectus Directive"), as implemented in the member states of the EEA, from the requirement to produce a prospectus under the Prospectus Directive for offers of securities, and in particular, any offer of the hybrid bond will be made pursuant to an exemption set out in Article 3(2) of the Prospectus Directive (in Finland pursuant to an exemption under Chapter 4, Section 3 of the Finnish Securities Markets Act). Accordingly, any person making or intending to make any offer of the hybrid bond within the EEA should only do so in circumstances in which no obligation arises for HKScan or the Lead Manager to publish a prospectus under the Prospectus Directive for such offer. Neither HKScan nor the Lead Manager has authorised, nor do they authorise, the making of any offer of securities through any financial intermediary.

In relation to each member state of the EEA which has implemented the Prospectus Directive (each a "Relevant Member State"), an offer to the public of any hybrid bond may not be made in that Relevant Member State, except that an offer of the hybrid bond to the public in that Relevant Member State may be made at any time under the following exemptions from the Prospectus Directive, if they have been implemented in that Relevant Member State:

1. to any legal entity which is a qualified investor as defined in the Prospectus Directive;

2. to investors who acquire the hybrid bond for a total consideration of at least EUR 100,000 per investor; and/or

3. in any other circumstances falling within Article 3(2) of the Prospectus Directive,

in each case provided that no such offer of the hybrid bond shall result in a requirement for the publication of a prospectus pursuant to Article 3 of the Prospectus Directive or the preparation of a key information document in any language other than Finnish pursuant to the PRIIPs Regulation by HKScan or the Lead Manager.

For the purposes of this provision, the expression an "offer to the public" in relation to the hybrid bond in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer of the hybrid bond to be offered so as to enable an investor to decide to purchase hybrid bond, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State.

Additional information

The information contained herein is not for release, publication or distribution, in whole or in part, directly or indirectly, in or into Australia, Canada, Hong Kong, Japan, New Zealand, South Africa or the United States or such other countries or otherwise in such circumstances in which the release, publication or distribution would be unlawful. The information contained herein does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, the hybrid bond in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction.

This communication does not constitute an offer of securities for sale in the United States. The hybrid bond has not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") or under the applicable securities laws of any state of the United States and may not be offered or sold, directly or indirectly, within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

This communication does not constitute an offer of the hybrid bond to the public in the United Kingdom. No prospectus has been or will be approved in the United Kingdom in respect of the hybrid bond. Consequently, this communication is directed only at (i) persons who are outside the United Kingdom, (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), (iii) high net worth entities falling within Article 49(2) and (iv) other persons to whom this communication may lawfully be distributed (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.