The Board of Directors of BillerudKorsnäs resolves on a fully secured rights issue of approximately SEK 3.5 billion and announces terms

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The Board of Directors of BillerudKorsnäs AB (publ) (”BillerudKorsnäs” or ”the Company”), (Nasdaq Stockholm: BILL), has today, with authorisation from the annual general meeting held on 10 May 2022, resolved on a fully secured new issue (“the Rights Issue”) of approximately SEK 3,498 million with preferential rights for existing shareholders, in order to repay a part of the debt that was raised in conjunction with the acquisition of Verso Corporation (“Verso”). Through this press release, BillerudKorsnäs’ Board of Directors also announces the terms of the Rights Issue.

The Rights Issue in brief

• New issue of approximately SEK 3,498 million with preferential rights for existing shareholders[1].
• Existing shareholders will receive one (1) subscription right for each share held in BillerudKorsnäs. Five (5) subscription rights entitle the subscription of one (1) new share.
• The subscription price has been set to SEK 84.5 per share.
• The record date for participation in the Rights Issue is 1 June 2022.
• The subscription period for new shares in the Rights Issue will last from 3 June 2022 to 17 June 2022.
• As has been previously communicated, the purpose of the Rights Issue is to repay a part of the debt that was raised in conjunction with the acquisition of Verso.
• BillerudKorsnäs’ three largest shareholders, AMF Pension and Funds (through AMF Tjänstepension), FRAPAG Beteiligungsholding and The Fourth Swedish National Pension Fund, which together hold approximately 26.5 per cent of the total number of shares and votes in BillerudKorsnäs, have, on customary conditions, committed to subscribe for new shares corresponding to their respective pro rata shares. AMF Pension and Funds (through AMF Tjänstepension) and The Fourth Swedish National Pension Fund have also entered into commitments to subscribe for additional shares beyond their pro rata entitlement in the Rights Issue and underwrite up to a total amount of SEK 500 million and SEK 400 million, respectively. Together, the subscription and underwriting commitments provided by these shareholders amount to approximately 52.4 per cent of the Rights Issue.
• In addition, Swedbank Robur Funds and AMF Pension and Funds (on behalf of certain other funds managed by AMF), which together hold approximately 12.6 per cent of the total number of shares and votes in BillerudKorsnäs, have declared their intention to subscribe for their pro rata shares in the Rights Issue.
• Danske Bank A/S, Danmark, Sverige filial and Skandinaviska Enskilda Banken AB (”Joint Global Coordinators and Joint Bookrunners”) have entered into an underwriting commitment, subject to customary conditions, for the remaining amount of the Rights Issue for which shareholders have not submitted subscription or underwriting commitments. Thus, the Rights Issue is fully secured.

Background and rationale

On 20 December 2021, BillerudKorsnäs announced that the Company had entered into a merger agreement with Verso, under which BillerudKorsnäs agreed to acquire Verso for a purchase price of approximately USD 825 million in cash. The acquisition was completed on 31 March 2022.

Verso is a leading American producer of graphic paper, specialty paper and market pulp, with a long-standing reputation for quality and reliability. The acquisition of Verso is fully in line with BillerudKorsnäs’ strategy to drive profitable growth in paperboard, and the ambition to expand into North America. BillerudKorsnäs aims to convert a number of Verso’s production assets into paperboard production while maintaining its position as quality and cost leader in speciality and coated paper.

In conjunction with the announcement of the acquisition of Verso on 20 December 2021, BillerudKorsnäs also communicated its intention to carry out a Rights Issue for existing shareholders. Assuming that the Rights Issue is fully subscribed, BillerudKorsnäs expects to receive total proceeds of approximately SEK 3,498 million, before the deduction of issue costs. The net proceeds will be used to repay a part of the debt that was raised in conjunction with the acquisition of Verso.

Terms of the Rights Issue

BillerudKorsnäs’ existing shareholders have preferential rights to subscribe for new shares in proportion to their existing shareholdings. Anyone who on the record date of 1 June 2022 is registered as a shareholder in BillerudKorsnäs by Euroclear Sweden is entitled to one (1) subscription right for each existing share. Five (5) subscription rights entitle subscription of one (1) new share.

In the event that not all shares are subscribed for by virtue of subscription rights, the Board of Directors shall decide on the allocation of shares which have not been subscribed for by virtue of subscription rights. In such case, shares shall firstly be allocated to those who also subscribed for shares by virtue of subscription rights, regardless of whether or not they were shareholders on the record date and in case of oversubscription, in proportion to the number of subscription rights each have exercised for subscription of shares or, to the extent this is not possible, by the drawing of lots. Secondly, allotment shall be made to others whom have subscribed for shares without virtue of subscription rights, and in case of oversubscription, in proportion to the number of shares specified in each subscription application or, to the extent this is not possible, by the drawing of lots. Thirdly, allocation shall be made to AMF Pension and Funds (through AMF Tjänstepension) and The Fourth Swedish National Pension Fund according to their underwriting commitments, and lastly, for the remaining amount of the Rights Issue, to the Joint Global Coordinators and Joint Bookrunners in accordance with their underwriting commitments. The underwriting commitments for AMF Pension and Funds (through AMF Tjänstepension), The Fourth Swedish National Pension Fund and the Joint Global Coordinators and Joint Bookrunners are further described below.

The Rights Issue is expected to increase BillerudKorsnäs’ share capital by a maximum of SEK 305,664,815, from the current SEK 1,537,642,792 to no more than SEK 1,843,307,608 through an issuance of no more than 41,391,588 shares. After the Rights Issue, the number of shares in BillerudKorsnäs is expected to not amount to more than 249,611,422 shares.

The new shares are issued at a subscription price of SEK 84.5 per share. No commission will be charged. Thus, the Rights Issue will provide BillerudKorsnäs with proceeds of up to SEK 3,498 million before deduction of transaction costs.

The record date at Euroclear Sweden for determining who is entitled to receive subscription rights is 1 June 2022. This means that the share will be traded including the right to participate in the Rights Issue up to, and including, 30 May 2022.

Subscription of new shares shall take place from 3 June 2022 up to, and including, 17 June 2022, or until such later date resolved by the Board of Directors. The Board of Directors of the Company is entitled to extend the subscription period which, if applicable, will be announced through a press release as soon as such decision has been made.

Trading with subscription rights will take place on Nasdaq Stockholm during the period from 3 June 2022 up to, and including, 14 June 2022.

For shareholders choosing not to participate in the Rights Issue, there will be a dilution effect of approximately 16.7 per cent, calculated based on the number of shares after the Rights Issue[2]. However, shareholders can gain economic compensation for this dilution by selling their subscription rights no later than 14 June 2022.

The Board of Directors’ decision regarding the Rights Issue has been made within the framework of the authorisation given by the Annual General Meeting held on 10 May 2022. For more information, please refer to the separate press release from the Annual General Meeting which was published on 10 May 2022.

The full terms and conditions of the Rights Issue as well as further information about BillerudKorsnäs will be presented in the prospectus that is expected to be published on BillerudKorsnäs’ website on 30 May 2022.

Subscription undertakings and underwriting commitments

BillerudKorsnäs’ three largest shareholders, AMF Pension and Funds (through AMF Tjänstepension), FRAPAG Beteiligungsholding and The Fourth Swedish National Pension Fund, which hold approximately 8.2, 12.0, and 6.3 per cent of the total number of shares and votes in BillerudKorsnäs, have, on customary conditions, undertaken to subscribe for new shares corresponding to their respective pro rata shares. AMF Pension and Funds (through AMF Tjänstepension) and The Fourth Swedish National Pension Fund have also entered into commitments to subscribe for additional shares beyond their pro rata entitlement in the Rights Issue and underwrite an amount of up to SEK 500 million and SEK 400 million, respectively. Together, the subscription and underwriting commitments provided by these shareholders amount to approximately 52.4 per cent of the Rights Issue. In addition, Swedbank Robur Funds and AMF Pension and Funds (on behalf of certain other funds managed by AMF), which hold approximately 6.5 and 6.0 per cent of the total number of shares and votes in BillerudKorsnäs, have declared their intention to subscribe for their pro rata shares in the Rights Issue.

The Joint Global Coordinators and Joint Bookrunners have entered into an underwriting commitment, subject to customary conditions, for the remaining amount of the Rights Issue for which shareholders have not submitted subscription or underwriting commitments. Thus, the Rights Issue is fully secured.

Indicative timetable for the Rights Issue

Financial and legal advisors

Danske Bank A/S, Danmark, Sverige filial and Skandinaviska Enskilda Banken are acting as Joint Global Coordinators and Joint Bookrunners. Advokatfirman Cederquist KB is acting as legal advisor to the Company as to Swedish law and Skadden, Arps, Slate, Meagher & Flom (UK) LLP is acting as legal advisor to the Company as to US law. Linklaters Advokatbyrå AB is legal advisor to the Joint Global Coordinators and Joint Bookrunners in connection to the Rights Issue.

For more information, please contact:

Christoph Michalski, President and CEO, +46 703 553 098
Ivar Vatne, CFO, +46 8 553 335 07

This information is information that BillerudKorsnäs AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons above, at 15:00 CEST on 25 May 2022.

Important information

In certain jurisdictions, the publication, announcement or distribution of this press release may be subject to restrictions according to law and persons in such jurisdictions where this press release has been published or distributed should inform themselves, observe and abide by such restrictions. The recipient of this press release is responsible for using this press release, and the information herein, in accordance with applicable rules in the respective jurisdiction. This press release does not contain or constitute an invitation nor offer to acquire, sell, subscribe for or otherwise trade in shares, subscription rights or other securities in BillerudKorsnäs in the United States or otherwise. Invitation to the persons concerned to subscribe for shares in BillerudKorsnäs will only be made by means of the prospectus that BillerudKorsnäs intends to publish on the Company’s website, following the approval and registration thereof by the Swedish Financial Supervisory Authority (Sw. Finansinspektionen). The prospectus will contain, among other things, risk factors, financial information as well as information regarding the Company’s Board of Directors. This press release has not been approved by any regulatory authority and is not a prospectus and accordingly, investors should not subscribe for or purchase any securities referred to in this press release except on the basis of information contained in the prospectus to be published by BillerudKorsnäs. This press release is not directed to persons located in the United States, Canada, Japan, Australia, Hong Kong, New Zealand, Singapore, South Africa or in any other jurisdiction where the offer or sale of the subscription rights, paid subscribed shares (Sw. betalda tecknade aktier) or new shares is not permitted. This press release may not be released, published or distributed, directly or indirectly, in or into the United States, Canada, Japan, Australia, Hong Kong, New Zealand, Singapore, South Africa or any other jurisdiction where such measure is wholly or partially subject to legal restrictions or where such measure would require additional prospectuses, offer documents, registrations or any other measure in addition to what is required under Swedish law. The information in this press release may not be forwarded, reproduced or disclosed in such a manner that would contravene such restrictions or would require such additional prospectuses, offer documents, registrations or any other measure. Failure to comply with this instruction may result in a violation of the United States Securities Act of 1933, as amended, (the “Securities Act”) or laws applicable in other jurisdictions. No subscription rights, paid subscribed shares or new shares have been or will be registered under the Securities Act, or with any other securities regulatory authority of any state or other jurisdiction of the United States and no paid subscribed shares or new shares may be offered, sold, resold, transferred, delivered or distributed, directly or indirectly, into or within the United States or on account of such persons other than pursuant to an exemption from, or in a transaction not subject to the registration requirements of the Securities Act, and in compliance with any applicable securities laws of any state or jurisdiction of the United States. No public offering of subscription rights, paid subscribed shares or new shares is made in the United States. There is no intention to register any securities referred to herein in the United States or to make a public offering in the United States. BillerudKorsnäs AB (publ) Phone: +46 (0)122 838 00 Visiting address: Linnégatan 18,Stockholm, Sweden Address: Box 5505, SE-114 85 Stockholm, Sweden www.granges.com This press release 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 (the “Order”) or (iii) are persons falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations etc.") 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 press release may otherwise be lawfully communicated (all such persons together being referred to as relevant persons). Any investment or investment activity to which this press release 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 press release or any of its content. Any offering of the securities referred to in this press release will be made by means of a prospectus. This press release is not a prospectus for the purposes of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (together with any related implementing and delegated regulations, the “Prospectus Regulation”). Investors should not invest in any securities referred to in this announcement except on the basis of information contained in the aforementioned prospectus. In any EEA Member State other than Sweden, this press release 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.

Matters discussed in this press release 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”, “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 the Company’s control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this press release by such forward-looking statements. The information, opinions and forward-looking statements contained in this press release speak only as at its date, and are subject to change without notice.