Bawat receives final approval from Nefco and decides on a directed share issue
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Hørsholm, Denmark, April 26th, 2023 - Bawat Water Technologies AB (”Bawat” or the “Company”) has received final approval from the Nordic Environment Finance Corporation (“Nefco”) regarding the Nefco-financing of SEK 25 million divided into two tranches and hence decides to carry out two directed share issues of a total of maximum 11,751,250 shares at a subscription price of SEK 1.60 per share, resulting in a total of SEK 18.8 million in issue proceeds, before transaction costs, in accordance with what was announced by the Company on April 17th, 2023. The First Directed Share Issue (as defined below) has been subscribed in full by the investors, in accordance with the previously announced subscription commitments.
The Nefco-financing
The Nefco-financing is intended, with the same terms that was announced on April 17th, 2023, to be disbursed in two tranches, with the first tranche consisting of a loan of approximately SEK 15 million (EUR 1.3 million) to be disbursed in the first half of 2023, and the second tranche consisting of a convertible loan of approximately SEK 10 million (EUR 1.0 million) to be disbursed in 2024. Since the Company has now received Final Approval from Nefco's board regarding the Nefco-Financing, this projects disbursement of funds from Nefco to Bawat in the end of the 2nd quarter 2023 provided that the loan agreement between Bawat and Nefco has been executed.
The Directed Share Issue
The terms of the Directed Share Issue
The Board of Directors of Bawat has resolved, with the support of an issue authorisation, on a directed share issue of 10,702,500 shares at a subscription price of SEK 1.60 per share to investors consisting of two family offices with thorough insight and knowledge in the shipping industry as anchor investors, a few other external investors and some existing larger shareholders, resulting in total issue proceeds of SEK 17,124,000 and an increase of the Company’s share capital with SEK 176,591.25 (the “First Directed Share Issue”) and will propose that the upcoming annual general meeting resolves on a directed share issue to Klaus Nyborg (chairman) and Marcus Hummer (CEO) of 1,048,750 shares at a subscription price of SEK 1.60 per share, resulting in total issue proceeds of SEK 1,678,000 and an increase of the Company’s share capital with SEK 17,304.38 (the “Second Directed Share Issue”). The First Directed Share Issue has been subscribed in full by the investors, in accordance with the previously announced subscription commitments. The Second Directed Share Issue will be subject to a resolution by the annual general meeting, which will, indicatively, be held on June 7, 2023, and will be convened in a separate notice, and, if resolved upon, will be subscribed by Klaus Nyborg and Marcus Hummer immediately thereafter. Such a resolution shall be valid only if it has been supported by shareholders representing at least nine-tenths of both the votes cast and the shares represented at the annual general meeting. Together, the First Directed Share Issue and the Second Directed Share Issue (together, the “Directed Share Issue”) may result in a total issue of 11,751,250 shares, an increase of the Company’s share capital by SEK 193,895.63 and total issue proceeds of SEK 18,802,000 before transaction costs.
A bridge loan of SEK 4.5 million from Selfinvest Aps and Klaus Nyborg is to be partly set off in the Directed Share Issue and partly repaid with proceeds from the Directed Share Issue and thus fully settled.
Dilution
The First Directed Share Issue corresponds to a dilution of approximately 21.3 percent of the current total number of outstanding shares and votes, and the Second Directed Share issue, provided that the annual general meeting resolves in accordance with the Board of Directors’ proposal, will result in an additional dilution of approximately 2.6 percent of the current total number of outstanding shares and votes. The Directed Share Issue corresponds to a total dilution of approximately 22.9 percent of the current total number of outstanding shares and votes and the total number of shares and votes in the Company will be 51,293,621 and the total share capital will be SEK 846,344.745 after the Directed Share Issue.
Deviation from the shareholders’ preferential rights and subscription price
The subscription price of SEK 1.60, which the subscribers in the First Directed Share Issue has subscribed shares for, and which
Klaus Nyborg and Marcus Hummer have committed to subscribe shares for, has been determined through a book building procedure. The subscription price corresponds to a discount of approximately 10 percent in relation to the volume-weighted average price on Nasdaq First North Growth Market during the 30 trading days preceding April 17th, 2023 and approximately 20 percent in relation to the volume-weighted average price on April 14th, 2023. It is the Board of Directors' assessment that the issue price is on market terms, such that it reflects the current market conditions and investor demand.
The Board of Directors is of the opinion that the proceeds from the Directed Share Issue would fulfill Nefco's requirement of matching Nefco-financing with equity which is seen as a favorable long-term financing for Bawat at market conditions and that the Directed Share Issue is positive for the Company's further development and to secure sufficient working capital need. The Board of Directors has also considered the possibility to raise the required equity through a rights issue. The Board of Directors has concluded that a rights issue would entail significantly longer execution time and thereby increased market risk exposure compared to a directed share issue. In addition, given the market volatility that has been observed during the beginning of 2023, and which is still ongoing, the Board of Directors has assessed that a rights issue would also require significant underwriting commitments from an underwriting syndicate, which would entail additional costs and/or additional dilution depending on the type of consideration paid for such underwriting commitments. Moreover, unlike a rights issue, the Directed Share Issue is expected to broaden the shareholder base and provide the Company with new reputable owners, which the Board of Directors believes will strengthen the liquidity of the shares and be beneficial to the Company. The Company's Board of Directors considers it of immense importance to have long-term and financially strong shareholders.
In light of the above, the Board of Directors has made the assessment that the Directed Share Issue with deviation from the shareholders' preferential rights is the most favorable alternative for Bawat and in the best interest of the Company's shareholders.
Advisors
Arctic Securities AS, filial Sverige is financial advisor to the Company in connection with the Directed Share Issue and the Nefco-financing. Advokatfirman Lindahl is legal advisor to the Company in connection with the Directed Share Issue.
For further information, please contact:
Marcus P. Hummer
CEO Bawat
+45 8870 8803
mph@bawat.com
www.bawat.com
This press release constitutes inside information that Bawat Water Technologies AB is obliged to make public pursuant to the EU Market Abuse Regulation 596/2014. The information was sent for publication, through the agency of the contact persons set out above, at the time stated by the Company's news distributor, Cision, at the publication of this press release.
About Bawat
The development of an entirely new approach to ballast water treatment utilizing onboard waste heat to treat ballast water led to the founding of Bawat in 2011. A ballast water treatment system avoids disposal of untreated water in seas and harbors.
Bawat's BWMS is a system that is simple, cost-effective, and sustainable, build on a zero environmental impact, using standard marine components. No filters, no chemicals no UV. And is the first to market a USCG/IMO Type Approval BWMS that uses pasteurization to treat ballast water in a one-pass process. Bawat has built upon its innovative breakthrough, and now offers ballast water solutions to the maritime industry in three categories:
- A ship BWMS for Retrofit and New Builds
- Mobile containerized solution for multiple vessel usage in a port, on a ship or for rigs
- Ballast Water as a Service for contingency services in ports
Bawat is an engineer-driven company that is rooted in the tradition of Danish maritime innovation and with a deep maritime insight: www.bawat.com.
Bawat is listed on Nasdaq First North Premier Growth Market
Certified Adviser:
Svensk Kapitalmarknadsgranskning AB
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Forward-looking statements
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