The Board of Directors of Componenta decided on a share issue as well as on offering of a hybrid bond and a new senior unsecured bond in order to strengthen the company’s financial position

Not for publication or distribution in or into Australia, Canada, Hong Kong, Japan, South Africa, the United States or any other jurisdiction in which the publication or distribution would be unlawful.

Componenta Corporation’s (“the Company” or “Componenta”) Board of Directors has, on 16 August 2013, decided to execute a share issue directed for subscription by public in Finland (“the Share Issue”), as well as to offer a hybrid bond (“the Hybrid Bond”) and a new Swedish law governed senior unsecured bond (“the New Senior Unsecured Bond”) for subscription by a limited group of selected investors (private placement). The purpose of the Share Issue and the bonds is to strengthen the Company’s financial position. The Company will use the capital to be raised through the Share Issue as well as the loan amounts of the Hybrid Bond and the New Senior Unsecured Bond for refinancing and repayment of the bond expiring on 29 September 2013, for repayment of other interest bearing debt as well as for the Company’s general financing needs.

The decision on the Share Issue is based on the authorizations granted by the Extraordinary General Meeting of Shareholders held on 16 August 2013 and by the Annual General Meeting of Shareholders held on 22 March 2013.

The Company has engaged Alexander Corporate Finance Oy as financial advisor for the strengthening of the financial position and lead manager and subscription place for the Share Issue and the Hybrid Bond, and has engaged Pareto Öhman AB as financial advisor, sole book runner and subscription place for the New Senior Unsecured Bond.

The Company announces a stock exchange release on the total number of subscriptions received in the Share Issue and the Hybrid Bond after the expiry of the subscription period of the Share Issue and the Hybrid Bond estimated to be on 23 August 2013. The final result of the Share Issue, the Hybrid Bond and the New Senior Unsecured Bond is estimated to be announced on 27 August 2013.

The unpaid interest accrued on the loan units of the existing capital notes, the bond and/or hybrid bond that will be used as payment for subscriptions will be paid to the holders of the loan units in cash on a date to be informed later.

Share Issue

A maximum of 7,500,000 new shares in the Company (“New Shares”) will be offered for subscription by public in Finland, in deviation from the shareholders’ pre-emption rights, at the subscription price of 1.60 euros per share. The subscription period for the New Shares will begin on 19 August 2013 at 9.00 a.m. and end on 23 August 2013 at 4.00 p.m, at the latest. The minimum subscription is 1,000 New Shares.

The principal of the Company’s existing capital notes and bond may be used as payment for share subscription in the Share Issue.

The terms and conditions for the Share Issue are attached to this stock exchange release. The purpose of the Share Issue is to strengthen the Company’s financial position, and therefore the Company has a weighty financial reason to deviate from the pre-emptive subscription right of the shareholders.

The Board of Directors has received written commitments from two major shareholders of the Company to convert the loan principals together with the accrued interest of the capital notes granted by such shareholders to the Company in June 2013 into New Shares. The total amount of the subscription commitments corresponds to a maximum of approximately 4 million euros.

The prerequisites for executing the Share Issue are that (i) the amount of capital to be raised through the Share Issue and/or the Hybrid Bond is at least 17 million euros (excluding conversions of the Company’s hybrid bond 2012 into the new Hybrid Bond), out of which at least 10 million euros should be raised through the Share Issue and at least 1.9 million euros should be paid in cash in connection with the executions of the Share Issue and/or the Hybrid Bond (not through conversions of the Company’s loan instruments), and (ii) the amount of capital to be raised through the New Senior Unsecured Bond is at least 30 million euros. The above-mentioned prerequisites are based on the terms and conditions of the Company’s syndicated loan. Although it would be obvious that the above-mentioned prerequisites are not fulfilled, or that they cannot be fulfilled, the Board of Directors may anyway execute the Share Issue, provided that the syndicate lenders and the subscribers of the New Senior Unsecured Bond have approved the nonfulfillment of a prerequisite or the prerequisites.

If all the New Shares will be fully subscribed in the Share Issue, the New Shares will, following the Share Issue, represent approximately 25.2 per cent of all of the Componenta shares and related voting rights.

The Company has submitted a prospectus related to the Share Issue in Finnish to the Finnish Financial Supervisory Authority for approval. The approval is expected to be obtained on 16 August 2013. The prospectus is expected to be available in Finnish on Componenta’s website, www.componenta.com/fi_investors/fi_componenta_ir, and on the website of the subscription place, www.acf.fi on, as well as in the Company and at the subscription place of the Share Issue, Alexander Corporate Finance Oy at the latest on 19 August 2013 at 9 a.m.

Hybrid Bond

The maximum amount of the Hybrid Bond is preliminarily 40 million euros. However, in case of oversubscription the amount of the loan may be increased. The minimum subscription is 100,000 euros. The principal of the Company’s existing capital notes, bond or hybrid bond may be used as payment for the Hybrid Bond subscriptions. The prerequisite for executing the Hybrid Bond is the execution of the Share Issue. The Company estimates to decide on the approval of the subscriptions of the Hybrid Bond on 27 August 2013 and the estimated issue date of the Hybrid Bond is 2 September 2013.

A hybrid bond is an equity bond subordinated to the Company’s other debt obligations. The offered Hybrid Bond will be subordinated to the hybrid bond 2012. In the Group’s IFRS financial statements, a hybrid bond is fully classified as an equity instrument and it improves the Company’s equity ratio. A hybrid bond does not give any shareholders rights to its holders and does not dilute the holdings of the current shareholders.

A hybrid bond holder is entitled to interest on the outstanding amount of the hybrid bond and to repayment of the principal but the Company has a right to decide on the payment date. The hybrid bonds have no maturity. The Company may redeem the Hybrid Bond in whole or in part at the earliest in the spring 2016. The interest rate of the Hybrid Bond is fixed to 12.2 per cent per annum until spring 2016, after which the interest rate increases if the Company does not redeem the Hybrid Bond.                     

New Senior Unsecured Bond

In connection with the Share Issue and the Hybrid Bond, the Company aims to raise capital under the New Senior Unsecured Bond. The maximum amount of the New Senior Unsecured Bond is preliminarily 50 million euros. The minimum subscription is 100,000 euros. The interest rate of the New Senior Unsecured Bond will be determined through a book building process. The principal of the Company’s bond 2010 may be used as payment for subscriptions in the New Senior Unsecured Bond.

The prerequisites for the New Senior Unsecured Bond are, in accordance with the marketing material, that (i) the amount of capital to be raised through the Share Issue and/or the Hybrid Bond is at least 17 million euros (excluding conversions of the Company’s hybrid bond 2012 into the new Hybrid Bond), out of which at least 10 million euros should be raised through the Share Issue. In accordance with the terms and conditions of the syndicated loan agreement, the amount of capital to be raised through the New Senior Unsecured Bond should be at least 30 million euros. Although it would be obvious that the above-mentioned prerequisites are not fulfilled, or that they cannot be fulfilled, the Board of Directors may anyway execute the New Senior Unsecured Bond, provided that the subscribers of the New Senior Unsecured Bond and the syndicate lenders have approved the nonfulfillment of a prerequisite or the prerequisites.

The terms and conditions for the New Senior Unsecured Bond will include dividend payment restrictions which are based on financial figures.

Helsinki 16 August 2013

COMPONENTA CORPORATION
 

Heikki Lehtonen
President and CEO

ENCL: Terms and Conditions for the Share Issue 2013

FURTHER INFORMATION:

Heikki Lehtonen
President and CEO
tel. +358 10 403 2200           

Mika Hassinen
CFO
tel. +358 10 403 2723

Componenta is a metal sector company with international operations and production plants located in Finland, Turkey, the Netherlands and Sweden. The net sales of Componenta were EUR 545 million in 2012 and its share is listed on the NASDAQ OMX Helsinki. The Group employs approx. 4,300 people. Componenta specializes in supplying cast and machined components and total solutions made of them to its global customers, who are manufacturers of vehicles, machines and equipment.  

DISCLAIMERS

The information contained in this communication is not for publication or distribution, directly or indirectly, wholly or in part, in or into Australia, Canada, Hong Kong, Japan, South Africa, the United States or any other jurisdiction in which it would be unlawful. The information contained in this communication shall not constitute an offer of securities for sale in the United States, nor may the securities be offered or sold in the United States absent registration or an exemption from registration as provided in the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder.  There is no intention to register any portion of the offering in the United States or to conduct a public offering of securities in the United States.

This communication shall not constitute a direct or indirect offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction.

The information contained herein shall not constitute an offer of securities to the public in the United Kingdom. No prospectus has been or will be registered in the United Kingdom in respect of the securities. The information contained herein 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(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) and (iii) high net worth entities falling within Article 49(2) of the Order, and other persons to whom it may lawfully be communicated (all such persons together being referred to as “relevant persons”).  Any investment activity to which this communication 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 document or any of its contents.

This communication is an advertisement for the purposes of applicable measures implementing Directive 2003/71/EC (such Directive, as amended, together with any applicable implementing measures in the relevant home Member State under such Directive, the "Prospectus Directive"). A prospectus prepared pursuant to the Prospectus Directive will be published in connection with any offering of securities, and will be available at locations receiving subscriptions for shares.

Any offer of securities that may be deemed to be made pursuant to this communication in any EEA Member State that has implemented the Prospectus Directive is only addressed to qualified investors in that Member State within the meaning of the Prospectus Directive.

Alexander Corporate Finance Oy is acting exclusively for Componenta Corporation and no one else in connection with the Share Issue and offering of the Hybrid Bond and Pareto Öhman AB is acting exclusively for Componenta Corporation and no one else in connection with the issue of the New Senior Unsecured Bond. They will not regard any other person (whether or not a recipient of this communication) as their respective clients in relation to the Share Issue, the Hybrid Bond and the New Senior Unsecured Bond, and will not be responsible to anyone other than Componenta Corporation for providing the protections afforded to their respective clients, nor for giving advice in relation to the Share Issue, the Hybrid Bond or the New Senior Unsecured Bond. No representation or warranty, express or implied, is made by Alexander Corporate Finance Oy or Pareto Öhman AB as to the contents, accuracy, completeness or verification of the information set forth in this communication, and nothing contained in this communication is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or the future. Neither Alexander Corporate Finance Oy nor Pareto Öhman AB assumes any responsibility for the contents, accuracy, completeness or verification of the communication and, accordingly, disclaim, to the fullest extent permitted by applicable law, any and all liability which they may otherwise be found to have in respect of this communication.