The Board of Directors of Allgon has resolved on fully guaranteed share rights issue of approximately SEK 127 million

The Board of Directors of Allgon AB (publ) (”Allgon” or the ”Company”) has today resolved on fully guaranteed new share issue of a maximum of 25,331,940 class B shares with preferential rights for the Company’s existing shareholders subject to the subsequent shareholders’ approval at an Extraordinary General Meeting (the “Rights Issue”). Notice of the Extraordinary General Meeting on 18 June 2018 will be published today. The subscription price in the Rights Issue is SEK 5.00 per class B share. The Company will be allocated approximately SEK 127 million before deduction of transaction costs after the completion of the Rights Issue.

Summary

• The proceeds from the Rights Issue will mainly be used to complete the financing of the acquisition of all shares in Tele-Radio International Holding AB (“Tele Radio”). For full information regarding the acquisition of Tele Radio, see the Company's press release published on 4 May 2018.
• Existing shareholders in the Company receives one (1) subscription right for each Class B share held as of the record date. Five (5) subscription rights entitles the holder to subscribe for six (6) new class B shares in the Rights Issue.
  • Record date for participation in the Rights Issue is 19 June 2018.
• Subscription in the Rights Issue may occur under the period as of 21 June 2018 up to and including 9 July 2018.
• The Company will be allocated approximately SEK 127 million before deduction of transaction costs after the completion of the Rights Issue.
  • The subscription price in the Rights Issue is SEK 5.00 per class B share, which corresponds to a discount of approximately 22 percent compared with the theoretical price after separation of subscription rights, based on the closing price of the Allgon share on 30 May 2018 on Nasdaq First North.
  • The Rights Issue requires that the Extraordinary General Meeting approves the Board's decision on 18 June 2018.
  • The Company has received subscriptions undertakings of approximately SEK 69 million, corresponding to 54.2 percent of the Rights Issue, and in addition has received guarantees of approximately SEK 58 million corresponding to 45.8 percent, from a group of guarantors consisting of 13 external investors and Verdane Capital. Consequently, the Rights Issue is fully guaranteed.

Background and rationale

On 4 May 2018, Allgon announced that the Company had entered into an agreement to acquire Tele Radio for a purchase consideration of SEK 350 million on a cash and debt free basis with a potential additional purchase price of SEK 50 million. The acquisition of Tele Radio is conditional upon Allgon receiving sufficient funding to complete the acquisition. The fully guaranteed Rights Issue of approximately SEK 127 million, before transaction costs, is a part of the financing of the acquisition of Tele Radio. The remaining part of the purchase price is funded through a bond issue of SEK 275 million announced today and an in-kind share issue of approximately SEK 67 million that will be directed to existing shareholders in Tele Radio. The acquisition of Tele Radio contributes to strengthening Allgon's position within the Radio Control business area, in which Åkerströms is previously included. For full information regarding the acquisition of Tele Radio, see the Company's press release published on 4 May 2018.

The majority of the proceeds from the Rights Issue will be used to finalize the acquisition of Tele Radio. The portion of the proceeds not used for the acquisition will, inter alia, be used to strengthen the Company's net liquidity and increase the Company's financial flexibility.

The Rights Issue 

The Board of Directors of Allgon has today resolved on a new share issue of up to a maximum of approximately SEK 127 million with preferential rights for the Company’s existing shareholders in proportion to their shareholdings as of the record date 19 June 2018.  

Holders of Class B shares, which on the record date of 19 June 2018 are entered in the share register held by Euroclear Sweden AB, have the right to subscribe for each existing Class B share to the subscription price of SEK 5.00 per class B share. The subscription price corresponds to a discount of approximately 22 percent compared to the theoretical price after the separation of subscription rights, based on the closing price of the Allgon share on 30 May 2018 on Nasdaq First North.

Shareholders receive one (1) subscription right for each class B share held on the record date. Five (5) subscription rights entitle to subscription of six (6) class B shares in the Rights Issue. The Rights Issue will, at full subscription, provide Allgon with a maximum of SEK 127 million, before deduction of transaction costs, by issuing a maximum of 25,331,940 class B shares.

The Rights Issue will result in an increase of the share capital of a maximum of SEK 126,659,701. Upon full subscription, the number of shares in Allgon, after the Rights Issue, will amount to a maximum of 46,441,890 share, all of which are class B shares and the share capital will amount to a maximum of SEK 232,209,453. For existing shareholders not participating in the Rights Issue, a dilution effect corresponding to approximately 54.55 percent of the total number of shares and votes in the Company following the Rights Issue will arise. Shareholders who choose not to participate in the Rights Issue have the opportunity to compensate for the economic dilution effect by selling their subscription rights.

The last day of trading in Allgon's class B shares, including the right to receive subscription rights in the Rights Issue, is 15 June 2018. Subscription of Class B shares with subscription rights (primary preferential right) shall be by cash payment in the period starting from 21 June 2018 until 9 July 2018. Subscription of Class B shares without subscription rights (secondary preferential right and oversubscription) shall be on a special subscription list during the period from 21 June 2018 until 9 July 2018. Payment for Class B shares subscribed without subscription rights shall be paid in cash no later than two banking days following the issue of settlement note which indicates notification of allocation. The Board of Directors is entitled to extend the subscription period and the last day for payment.

In the event that not all new Class B shares have been subscribed for under subscription rights (primary preferential right), the Board of Directors shall decide that allotment of shares subscribed without subscription rights shall take place within the maximum amount of the issue. Firstly, class B shares that are not subscribed for with primary preferential rights are offered to all shareholders for subscription (subsidiary preferential right). Unless otherwise offered shares are sufficient for the subscription that is made with subsidiary preferential rights, the shares shall be distributed among the subscribers in relation to the total number of shares they own in the Company as of the record date, and insofar as this cannot be done, by lottery. Secondly, if all Class B shares are not subscribed for as above, allotment to persons who have registered interest in subscribing to shares without preferential rights and, in the case of oversubscription, in relation to the number of class B shares listed in the respective subscription notices, and, in to the extent that this cannot be done, by lottery. Finally, allocation of remaining class B shares shall be made to the guarantors, in their capacity as guarantors and in accordance with the terms of the respective guarantor, and any additional guarantees, subscription undertakings and issue guarantees.

The Rights Issue requires approval of an Extraordinary General Meeting. The Extraordinary General Meeting is scheduled for 18 June 2018 and is intended to be held in Baker McKenzie's premises at Vasagatan 7 in Stockholm. The notice will be published today through press release.

The full terms and conditions of the Rights Issue and information about the Company will be included in the prospectus, which is expected to be published on the Company's website around 20 June 2018.

Subscription undertakings and guarantees

The Company has received subscriptions undertakings of approximately SEK 69 million, corresponding to 54.2 percent of the Rights Issue, and in addition has received guarantees of approximately SEK 58 million corresponding to 45.8 percent, from a group of guarantors consisting of 13 external investors and Verdane Capital. Consequently, the Rights Issue is fully guaranteed. Additional information about the guarantors will be included in the prospectus of the Rights Issue, which is expected to be published on the Company's website around 20 June 20 2018.

Preliminary time table for the Rights Issue 

Advisors

ABG Sundal Collier has together with Redeye acted as financial advisors to the Company and Baker McKenzie is the legal advisor to the Company in connection with the Rights Issue.

This information is information that Allgon AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation 596/2014. The information was submitted for publication, through the agency of the contact person set out below, at [08:35] CET on 31 May 2018. 

For more information and contact:

Johan Hårdén, CEO Allgon AB
johan.harden@allgon.se
+46 73 385 92 19 

About Allgon 

Allgon is a corporate group with a strong entrepreneurial culture. Our focus is on giving value to our shareholders by developing and acquiring top businesses with a global customer base within digitalization and IoT. Allgon (ALL B) is trading on Nasdaq First North Stockholm with FNCA Sweden as certified adviser. Our specialist companies deliver a wide range of services for advanced industrial IoT equipment, digital communications systems, cloud-based infrastructure and wireless solutions for demanding environments. Our global customer base is within automotive, mobile and telecom, transport, construction and broadcasting sectors. For more information: www.allgon.se.

Important information 

The release, announcement or distribution of this press release may, in certain jurisdictions, be subject to restrictions. The recipients of this press release in jurisdictions where this press release has been published or distributed shall inform themselves of and follow such restrictions. The recipient of this press release is responsible for using this press release, and the information contained herein, in accordance with applicable rules in each jurisdiction. This press release does not constitute an offer, or a solicitation of any offer, to buy or subscribe for any securities in Allgon in any jurisdiction, neither from Allgon nor from someone else.

Any investment decision in connection with the Rights Issue must be made on the basis of all publicly available information relating to the Company. Such information has not been independently verified by the financial advisors. The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness.

This press release does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein may not be sold in the United States absent registration or an exemption from registration under the US Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There is no intention to register any securities referred to herein in the United States or to make a public offering of the securities in the United States. The information in this press release may not be announced, published, copied, reproduced or distributed, directly or indirectly, in whole or in part, within or into Australia, Hong Kong, Japan, Canada, New Zeeland, Singapore, South Africa,  the United States or in any other jurisdiction where such announcement, publication or distribution of the information would not comply with applicable laws and regulations or where such actions are subject to legal restrictions or would require additional registration or other measures than what is required under Swedish law. Actions taken in violation of this instruction may constitute a crime against applicable securities laws and regulations.

This press release is not a prospectus for the purposes of Directive 2003/71/EC (the “Prospectus Directive”) and has not been approved by any regulatory authority in any jurisdiction. A prospectus regarding the Rights Issue described in this press release will be prepared and submitted to Swedish Financial Supervisory Authority (Sw. Finansinspektionen). Following the Swedish Financial Supervisory Authority's approval and registration of the prospectus, the prospectus will be published and kept available at Allgon's website.

In the United Kingdom, this document and any other materials in relation to the securities described herein is only being distributed to, and is only directed at, and any investment or investment activity to which this document relates is available only to, and will be engaged in only with, “qualified investors” who are (i) persons having professional experience in matters relating to investments who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). In the United Kingdom, any investment or investment activity to which this communication relates is available only to, and will be engaged in only with, relevant persons. Persons who are not relevant persons should not take any action on the basis of this press release and should not act or rely on it.

Forward-looking statements

This press release contains forward-looking statements that reflect the Company’s intentions, beliefs, or current expectations about and targets for the Company’s future results of operations, financial condition, liquidity, performance, prospects, anticipated growth, strategies and opportunities and the markets in which the Company operates. Forward-looking statements are statements that are not historical facts and may be identified by words such as “believe”, “expect”, “anticipate”, “intend”, “may”, “plan”, “estimate”, “will”, “should”, “could”, “aim” or “might”, or, in each case, their negative, or 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 the expectations reflected in these forward-looking statements are reasonable, it can give no assurances that they will materialize or prove to be correct. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements as a result of many factors. 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 Company does not guarantee that the assumptions underlying the forward-looking statements in this press release are free from errors and readers of this press release should not place undue reliance on the forward-looking statements in this press release. The information, opinions and forward-looking statements that are expressly or implicitly contained herein speak only as of its date and are subject to change without notice. Neither the Company nor anyone else undertake to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this press release.

Information to distributors 

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, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the shares in Allgon have been subject to a product approval process, which has determined that such shares 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 in Allgon may decline and investors could lose all or part of their investment; the shares in Allgon offer no guaranteed income and no capital protection; and an investment in the shares in Allgon 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. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the share issue.

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 in Allgon.

Each distributor is responsible for undertaking its own Target Market Assessment in respect of the shares in Allgon and determining appropriate distribution channels. 

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