Archer Limited: Contemplated private placement

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NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, HONG KONG, JAPAN OR THE UNITED STATES, OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED HEREIN.

Hamilton, Bermuda 6 March 2023

Reference is made to the announcement made by Archer Limited (the "Company" and together with its subsidiaries, the "Group") today regarding an agreement in principle with respect to a contemplated refinancing of the Group (the "Refinancing") (the "Refinancing Announcement").

As announced, the Company is contemplating a private placement (the "Private Placement") of new common shares in the Company (the "Offer Shares") for gross proceeds of the NOK equivalent of USD 100 million. The Private Placement is directed towards investors subject to and in compliance with applicable exemptions from relevant prospectus or registration requirements. The Company has engaged DNB Markets, a part of DNB Bank ASA, Pareto Securities AS, Skandinaviska Enskilda Banken AB (publ), Oslo Branch, SpareBank 1 Markets AS and Arctic Securities AS as joint bookrunners in the Private Placement (the "Managers").

The subscription price per Offer Share has been set to NOK 1 (the “Offer Price”), based on a broad wall-crossing exercise targeting both existing shareholders and new investors. The Private Placement will be divided into two separate tranches, where the first tranche will consist of up to 851,241,388 Offer Shares ("Tranche 1") and the second tranche will consists of the remaining Offer Shares allocated in the Private Placement ("Tranche 2"). Hemen and Paratus (as defined below) have agreed to be allocated Offer Shares in Tranche 2, with other investors expected to receive Offer Shares in Tranche 1. The issuance of Offer Shares in Tranche 2 will be subject to approval by a special general meeting of the Company to be held on or about 28 March 2023 (the "SGM"). Hemen has agreed to a six month lock up on shares held in Archer, including the Offer Shares allocated in the Private Placement.

The net proceeds from the Private Placement will be used to retire existing debt. In the event that approval by the SGM is not obtained to issue the Offer Shares in Tranche 2, the net proceeds from Tranche 1 will be used to retire part of the Company's current debt arrangements.

The application period for the Private Placement will start today, 6 March 2023 at 16:30 (CET) and will close on 7 March 2023 at 08:00 (CET). The Company reserves the right to shorten, close or extend the application period at any time at its sole discretion, without notice. The minimum order size and allocation in the Private Placement will be the NOK equivalent of EUR 100,000, provided that the Company may, at its sole discretion, offer and allocate an amount below EUR 100,000, pursuant to any applicable exemptions from applicable prospectus requirements being available.

One of the Company's largest shareholders, Hemen Holding Ltd. ("Hemen"), is supportive of the transaction and has indicated an interest to subscribe for the NOK equivalent of USD 25.0 million. The Company’s largest shareholder, Paratus Energy Services Limited ("Paratus"), has indicated an interest to subscribe for the NOK equivalent of USD 15.5 million. The CEO and CFO in Archer have confirmed their intention to subscribe for NOK 1.0 million and NOK 400,000, respectively. Jan Erik Klepsland, which is part of the Board, has confirmed his intention to subscribe for minimum NOK 500,000. Hemen, Paratus, the CEO and CFO, and Jan Erik Klepsland will receive full allocation for their indicated amounts.

Allocation of Offer Shares will be made at the discretion of the Company's Board of Directors in consultation with the Managers (and subject to approval by the SGM with respect to the Offer Shares to be issued in Tranche 2) after expiry of the application period, subject to any shortening or extension of the application period.

Completion of Tranche 1 is subject to: (i) All necessary corporate resolutions being validly made by the Company including, without limitation the Board resolving to consummate the Private Placement and to issue Offer Shares in Tranche 1 based on the Company's currently authorized but unissued share capital (ii) the Pre-Funding Agreement (as defined below) being entered into and remaining in full force and effect with respect to the Offer Shares in Tranche 1; and (iii) registration of the Offer Shares to be issued as part of Tranche 1 with Euronext Securities Oslo (the "VPS") .

Completion of Tranche 2 is subject to: (i) All necessary corporate resolutions being validly made by the Company including, without limitation (a) the Board resolving to consummate the Private Placement; and (b) the SGM resolving to increase the Company's authorized share capital with the amount required to issue the Offer Shares in Tranche 2, and the Board thereafter resolving to issue Offer Shares in Tranche 2, (ii) the Pre-Funding Agreement being entered into and remaining in full force and effect with respect to the Offer Shares in Tranche 2; and (iii) registration of the Offer Shares to be issued as part of Tranche 2 with the VPS.

The Private Placement may be cancelled if the above-mentioned conditions are not fulfilled and may be cancelled by the Company in its sole discretion for any other reason. However, Tranche 1 is not conditional upon Tranche 2, and the Offer Shares delivered to investors in Tranche 1 will be validly issued and final regardless of whether the relevant conditions for completion of Tranche 2 are satisfied.

Settlement of Offer Shares allocated in Tranche 1 is expected to take place on or about 9 March 2023 on a delivery versus payment (DVP) basis. The Offer Shares allocated in Tranche 1 will be issued on a separate ISIN no. BMG0451H1410 pending approval and publication of a prospectus for the listing of the Offer Shares and for the Subsequent Offering (as defined below), expected to be published on or about 13 March 2023 (subject to timely approval by the Financial Supervisory Authority of Norway) (the "Prospectus") following which these shares will be issued on the Company's ordinary ISIN and become fully tradeable. Settlement of Offer Shares allocated in Tranche 2 is expected to take place on or about 30 March 2023 on a delivery versus payment (DVP) basis. DVP settlement is expected to be facilitated by a pre-payment agreement expected to be entered into between the Company and DNB Markets, a part of DNB Bank ASA (the "Pre-Funding Agreement"). 

The Company’s Board will, subject to completion of the Private Placement, consider to carry out a subsequent offering of new shares (the "Subsequent Offering") which, subject to applicable securities laws, will be directed towards existing shareholders in the Company as at 6 March 2023 (as registered with the VPS on 8 March 2023) who (i) were not allocated Offer Shares in the Private Placement, and (ii) 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. Such Subsequent Offering is expected to be launched shortly after approval of the Prospectus.

The Company has considered the Private Placement in light of the equal treatment obligations under applicable regulations and is of the opinion that the waiver of the preferential rights inherent in a private placement, taking into consideration the time, costs and risk of alternative methods of the securing the desired funding, is in the common interest of the shareholders of the Company. The Board considers that although the Refinancing, including the Private Placement, will imply a dilution of the existing shareholders of the Company, the existing shareholders, to the extent possible, will be given the opportunity to participate in, and be allocated shares in the Private Placement and that the remaining shareholders will be given the opportunity to mitigate the effect of the Refinancing, including the Private Placement, through participation in the contemplated Subsequent Offering. Taking these factors into consideration, and balancing the Company’s need to refinance the Company’s debt through the contemplated Refinancing and the interests of the minority shareholders, the Board is of the view that the transactions, taken as a whole, represent a balanced solution taking into account the common interest of the Company and its shareholders, cf. section 5-14 of the Norwegian Securities Trading Act.

DNB Markets, part of DNB Bank ASA ("DNB Markets"), Pareto Securities AS, Sparebank 1 Markets, Skandinavia Enskildabanken AB (Public) Oslo Branch and Arctic Securities AS are acting as Joint Bookrunners for the Private Placement (jointly the "Managers").

DNB Markets is acting as financial adviser to the Company in connection with the refinancing. 

Fulcrum Advisory Partners LLP (“Fulcrum Partners”) provided consultancy services to the Company in connection with the Refinancing.

Advokatfirmaet Schjødt AS is acting as legal advisor to the Company and Advokatfirmaet Wiersholm AS is acting as legal advisors to the Managers.

This information is considered to be inside information pursuant to the EU Market Abuse Regulation and was published by Joachim Houeland, Manager Treasury and Investor Relations of the Company, on 6 March 2023 at 16:30 (CET).

For additional information, please contact:

Dag Skindlo, Chief Executive Officer, Mobile: +4798226624, Email:dag.skindlo@archerwell.com

Espen Joranger, Chief Financial Officer, Mobile: +47 982 06 812, Email:espen.joranger@archerwell.com

Joachim Houeland, Manager Treasury and Investor Relations, Mobile: +47 482 78 748, Email: joachim.houeland@archerwell.com

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Important information:

This announcement is not and does not form a part of any offer to sell, or a solicitation of an offer to purchase, any securities of the Company. Copies of this announcement are not being made and may not be distributed or sent into any jurisdiction in which such distribution would be unlawful or would require registration or other measures.

The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and accordingly may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and in accordance with applicable U.S. state securities laws. The Company does not intend to register any part of the offering in the United States or to conduct a public offering of securities in the United States. Any sale in the United States of the securities mentioned in this announcement will be made solely to “qualified institutional buyers” as defined in Rule 144A under the Securities Act.

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 Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The “Prospectus Regulation” means Regulation (EU) 2017/1129, as amended (together with any applicable implementing measures) in any Member State.

This communication is only being distributed to and is only directed at persons in the United Kingdom that are (i) 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) high net worth entities, and other persons to whom this announcement may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investments activity to which this communication relates is available only for 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.

The issue, subscription or purchase of shares or other financial instruments in the Company is subject to specific legal or regulatory restrictions in certain jurisdictions. Neither the Company nor the Managers assume any responsibility in the event there is a violation by any person of such restrictions. The distribution of this release may in certain jurisdictions be restricted by law. Persons into whose possession this release comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

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 “believe”, “expect”, “anticipate”, “strategy”, “intends”, “estimate”, “will”, “may”, “continue”, “should” and similar expressions. Any forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Such assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict. 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 make any guarantee that the assumptions underlying any forward-looking statements in this announcement are free from errors nor does it accept any responsibility for the future accuracy of the opinions expressed in this announcement or any obligation to update or revise the statements in this announcement to reflect subsequent events. You should not place undue reliance on any forward-looking statements in this announcement. The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice. The Company does not undertake any obligation 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 announcement.

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. 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. This announcement is an advertisement and is not a prospectus for the purposes of the Prospectus Regulation as implemented in any Member State.

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