Changes in Componenta’s major shareholders – company plans for rights issue and reverse share split

Componenta Corporation Stock Exchange Release, 5 October 2020 at 11:10

As of today, 5 October 2020, CapMan managed funds and Leverator Oy have sold all their shares of Componenta Corporation, 36,685,788 shares in total, to an investor group led by Joensuun Kauppa ja Kone Oy and Etra Capital Oy at the price of EUR 0.04 per share. The shares sold today represent approximately 15% of the company shares and votes.

Componenta Corporation’s Board of Directors will issue with a separate stock exchange release a notice to the Extraordinary General Meeting in which it proposes that the EGM authorize the Board of Directors to resolve on a rights issue.

Based on authorization of the Extraordinary General Meeting, the Board of Directors would resolve on the planned rights issue in which company shareholders would receive for one (1) share a one subscription right with which they can subscribe for one (1) new share. The subscription price is planned to be EUR 0.04 per share. With the rights issue, the company intends to receive approximately MEUR 9.5 gross proceeds.  

The proceeds of the rights issue are meant to be used to strengthen the company’s financial position. In addition, the company intends to start negotiations with creditors for paying off in advance the restructuring debt of the parent company early in 2021. The amount of the restructuring debt in question was MEUR 7.2 as of 30 June 2020. Regardless of the planned creditor negotiations, Componenta Corporation will pay its restructuring debt installment according to the repayment schedule in November 2020.

The planned rights issue would take place by end of 2020. Joensuun Kauppa ja Kone Oy, Etra Capital Oy and Harri Suutari, Chairman of the Board of Directors of Componenta Corporation have committed to vote in favor of the Board of Directors’ proposals related to the planned rights issue and the planned reverse share split (as defined below) at the Extraordinary General Meeting, and to subscribe for issue shares at the minimum with the subscription rights allocated to them in proportion of their shareholdings which after today’s purchase of shares is approximately 21 per cent of the company’s outstanding shares and votes. UB Securities Oy would act as the Lead Manager of the planned rights issue.

In addition, Componenta Corporation’s Board of Directors will propose that the Extraordinary General Meeting resolves on a reverse share split. The reverse split would take place after the implementation of the rights issue. Following the implementation of the reverse split, fifty (50) shares equal one (1) share.

The planned reverse split would be implemented so that the company would redeem without compensation from each shareholder the number of shares held multiplied by 49/50, i.e. for each fifty (50) existing shares Componenta would redeem 49 shares. In order to avoid share fractions when implementing the planned reverse share split, Componenta would direct share issue without compensation to shareholders so that prior to the redemption each shareholder would have a number of shares divisible by fifty (50).

The reverse share split is expected to enhance trading conditions for the shares and contribute to the shares’ efficient price formation on the stock market. Componenta Corporation’s Board of Directors considers that the reverse share split is therefore in the interest of the company and all its shareholders. The Board of Directors also considers that there is a particularly weighty financial reason for the company to implement the reverse share split and the share issue and redemption related to it. The reverse share split does not affect Componenta Corporation’s equity. The Board of Directors would pass a resolution on the exact day of implementation of the reverse split after the rights issue has been carried out.

“Componenta has strong know-how in manufacturing industrial components, and it is the leading manufacturer of metal components in Finland. Componenta has good prerequisites to be a stronger partner for its customers in today’s market where supply chains are further enhanced and the use of subcontracting is increasing. I believe in the future possibilities of Finnish industry and manufacturing,” states Kyösti Kakkonen, CEO of Joensuun Kauppa ja Kone Oy, kauppaneuvos (Finnish honorary title).

“It is not purposeful for a listed company to remain in restructuring throughout the whole six-year restructuring programme. This ownership arrangement and the full support from the main owners will open up possibilities for the company to release itself from the restructuring programme of the parent company. This would have significant positive effects on the business of the whole group. In addition, it would enable the group to normalize its financing,” says Harri Suutari, Chairman of Componenta Corporation Board of Directors.

”This is clearly a step forward for us. With these actions, Componenta’s market position will improve significantly from the point of view of our customers and other stakeholders. This will give us credibility with our customers when we look for new sales and allocation of customer volumes to Componenta. Furthermore, these arrangements will have a positive effect on us executing our growth strategy,” says Componenta Corporatio's President and CEO Sami Sivuranta.

COMPONENTA CORPORATION

Sami Sivuranta
President and CEO
 

For further information, please contact:

Sami Sivuranta, President and CEO, tel. +358 10 403 2200
Marko Karppinen, CFO, tel. +358 10 403 2101
 

Componenta is a technology company which specializes in supplying cast and machined components to global manufacturers of vehicles, machines and equipment. The company’s share is listed on Nasdaq Helsinki.