CTEK resolves on a rights issue of approximately SEK 350 million

THIS PRESS RELEASE MAY NOT BE RELEASED, PUBLISHED OR DISTRIBUTED, DIRECTLY OR INDIRECTLY, IN OR TO THE UNITED STATES, AUSTRALIA, CANADA, NEW ZEALAND, HONG KONG, SINGAPORE, JAPAN, SWITZERLAND OR SOUTH AFRICA OR IN ANY OTHER JURISDICTION WHERE THE RELEASE, PUBLICATION OR DISTRIBUTION OF THE INFORMATION WOULD BE CONTRARY TO LAW OR WOULD REQUIRE REGISTRATION OR OTHER ACTIONS

The Board of Directors (the ”Board”) of CTEK AB (publ) (”CTEK” or the ”Company”) has resolved on a new share issue of approximately SEK 350 million with preferential rights for the Company’s existing shareholders (the “Rights Issue”). The Rights Issue is subject to approval by an extraordinary general meeting around 3 March 2023. The Company’s largest shareholder, Investment AB Latour (publ) (“Latour”), holding 30.6 percent of outstanding shares in CTEK, has committed to subscribe for its pro rata share in the Rights Issue. In addition to the subscription commitment, Latour has entered into a guarantee commitment for the remaining part of the Rights Issue. Thus, the Rights Issue is fully covered through subscription- and guarantee commitments from the Company’s largest shareholder. In addition, several of CTEK’s major institutional shareholders including Fjärde AP Fonden (“AP4”), Skirner AB (“Skirner”), AMF Tjänstepension AB (“AMF”), Swedbank Robur Fonder AB (“Swedbank Robur”) and SEB Fonder (“SEB”), holding approximately 27 percent of outstanding shares in CTEK, have expressed their intention to subscribe for new shares corresponding to their pro rata share in the Rights Issue. Altogether, Latour and said shareholders hold approximately 58 percent of outstanding shares in CTEK. The net proceeds from the Rights Issue are intended to decrease CTEK’s indebtedness, increase the Company’s interest coverage ratio and ensure sufficient financial flexibility to carry out its long-term growth strategy.

”Despite the extensive cost reduction measures we have initiated, the Board and management have concluded that  we need to strengthen our balance sheet through a rights issue to improve our financial flexibility and capitalise on a significant potential – not least within EVSE – without losing pace”, says Ola Carlsson, interim CEO and Group President.

The Rights Issue in brief

• The Rights Issue of approximately SEK 350 million is intended to decrease CTEK’s indebtedness, increase the Company’s interest coverage ratio and ensure sufficient financial flexibility to carry out its long-term growth strategy.
• The Company’s largest shareholder, Latour, has committed to subscribe for its pro rata share of 30.6 percent of the outstanding shares and votes in CTEK in the Rights Issue. In addition to the subscription commitment, Latour has entered into a guarantee commitment for the remaining part of the Rights Issue. Thus, the Rights Issue is fully covered through subscription- and guarantee commitments from the Company’s largest shareholder.
• Several of CTEK’s largest institutional shareholders have expressed their support for the Rights Issue, whereof AP4, Skirner, AMF, Swedbank Robur and SEB, holding approximately 27 percent of outstanding shares in CTEK, have also declared their intention to subscribe for new shares corresponding to their pro rata share in the Rights Issue. Altogether, Latour and said shareholders hold approximately 58 percent of outstanding shares in CTEK.
• The complete terms for the Rights Issue, including subscription price, are expected to be announced around 28 February 2023. Provided that the Rights Issue is approved by the extraordinary general meeting, the record date for the Rights Issue is expected to be 8 March 2023 and the subscription period will run from 10 March 2023 until 24 March 2023.
• The Board intends to summon an extraordinary general meeting around 3 March 2023. A press release will be published separately.

Background and reasons

CTEK is one of the leading global suppliers of premium low voltage chargers and one of the largest EVSE product suppliers in Sweden. The Company is characterised by a strong innovation culture and works continuously to improve and develop new products tailored to customer needs. CTEK was founded in Vikmanshyttan in 1997 and now has sales in more than 70 countries. With a history of innovation and technology leadership, the Company meets new customer requirements by continuously developing its product offering and operations pro-actively. Based on its technology leadership, the Company has established strong and long-standing customer relationships with more than 50 of the world’s most prestigious OEMs, including Ferrari, Lamborghini and Porsche. In addition to OEMs, the Company also offers products to workshops, distributors, retailers, charge point operators and property owners.

CTEK’s credit facility is subject to financial covenants, including leverage ratio and interest coverage ratio, which have been negatively affected by CTEK’s weakened financial results. In addition, the global factors mentioned above could further limit the Company’s ability to comply with the financial covenants.

The current market environment continues to be uncertain, but the Company assesses that the market will continue to grow in the long-term. Certain cost increases, which have affected profitability, are assessed to be temporary and over time CTEK assesses that the pricing of the Company’s products can be adapted to the cost environment. In addition, CTEK has continuously reviewed its cost structure and continuously strives for a more effective production process and organisation. In order to decrease CTEK’s indebtedness, increase the Company’s interest coverage ratio and ensure sufficient financial flexibility to carry out its long-term growth strategy, the Board, on 8 February 2023, resolved on the Rights Issue of approximately SEK 350 million, subject to approval by an extraordinary general meeting. The Board assesses that the existing working capital is sufficient for CTEK’s current working capital needs for the following twelve-month period. This assessment has been made with regard to the Company’s current business- and development plan. The Rights Issue will strengthen CTEK’s balance sheet, decrease the leverage ratio to levels below the financial target and enable operational investments.

The Rights Issue

In order to decrease CTEK’s indebtedness, increase the Company’s interest coverage ratio and ensure sufficient financial flexibility to carry out its long-term growth strategy the Board resolved on a Rights Issue of approximately SEK 350 million, subject to approval by an extraordinary general meeting around 3 March 2023.

The complete terms for the Rights Issue, including subscription price, number of new shares to be issued and share capital increase are expected to be announced around 28 February 2023.

In the Rights Issue CTEK’s current shareholders have a preferential right to subscribe for new shares in proportion to the number of shares held on the record date, which is expected to be 8 March 2023. Shares which are subscribed for without preferential rights will be offered to current shareholders and other investors who have applied to subscribe for new shares without preferential rights. The subscription period is expected to run from 10 March 2023 to 24 March 2023.

Trading in subscription rights is expected to take place on Nasdaq Stockholm during 10 March 2023 - 21 March 2023. Trading in BTA (paid subscribed shares) is expected to take place on Nasdaq Stockholm during 10 March 2023 - 28 March 2023.

Extraordinary general meeting

The Rights Issue is subject to approval by an extraordinary general meeting around 3 March 2023. Notice for the extraordinary general meeting will be published separately on www.ctek.com.

Subscription commitments, intention to subscribe for new shares and guarantee commitments

The Company’s largest shareholder, Latour, holding 30.6 percent of outstanding shares in CTEK, has committed to subscribe for its pro rata share in the Rights Issue. In addition to the subscription commitment Latour has entered into a guarantee commitment for the remaining part of the Rights Issue. Thus, the Rights Issue is fully covered through subscription- and guarantee commitments from the Company’s largest shareholder. In addition, several of CTEK’s major institutional shareholders have expressed their support for the Rights Issue, whereof AP4, Skirner, AMF, Swedbank Robur and SEB, holding approximately 27 percent of outstanding shares in CTEK, have also declared their intention to subscribe for new shares corresponding to their pro rata share in the Rights Issue. Altogether, Latour and said shareholders hold approximately 58 percent of outstanding shares in CTEK.

Prospectus and preliminary timetable for the Rights Issue

The prospectus is expected to be published around 8 March 2023 and will contain complete information about the Rights Issue.

Lock-up commitments

In connection with the Rights Issue, the Company will, subject to customary exceptions, agree to a lock-up undertaking on future share issuances for a period of 180 calendar days following completion of the Rights Issue. Members of the Company’s Board of Directors and management will, subject to customary exceptions, agree not to sell their shares in the Company for a period of 90 calendar days after the Rights Issue has been completed.

The Board of CTEK AB (publ)

Advisors

In relation to the Rights Issue, the Company has engaged Carnegie Investment Bank AB (publ) and Swedbank AB (publ) as Joint Global Coordinators and Joint Bookrunners. Advokatfirman Vinge KB is legal advisor in relation to the Rights Issue.

This information constitutes inside information as CTEK AB (publ) is obliged to disclose under the EU Market Abuse Regulation 596/2014. The information was provided by the contact person below for publication 8 February 2023 at 07:15 CET.

For more information, please contact:

Ola Carlsson, interim CEO and Group President

Email: ola.carlsson@ctek.com

Niklas Alm, Investor Relations

Tel: +46 708 24 40 88

Email: niklas.alm@ctek.com

About CTEK

CTEK is one of the leading global suppliers of battery chargers for various premium segment vehicles and one of Sweden's largest suppliers of chargers and accessories for electric vehicle charging. The company is defined by a strong innovation culture and works continuously to improve and develop new products to suit customer needs. CTEK was founded in 1997 in Vikmanshyttan and has sales in over 70 countries. With a history of innovation and technology leadership, the company

proactively meets new customer needs by continuously evolving its product range and operations. Through its technology leadership, CTEK has established strong, long-standing customer relationships with over 50 of the world's most prestigious vehicle manufacturers. In addition to vehicle manufacturers, CTEK offers products to vehicle repair shops, distributors, retailers, charging point operators and property owners, among others.

IMPORTANT INFORMATION

This announcement is not and does not form a part of any offer for selling, or a request to submit an offer to buy or acquire, shares or other securities of the Company.

Copies of this announcement are not being made and may not be distributed or sent into the United States, Australia, Hong Kong, Japan, Canada, New Zealand, Switzerland, Singapore, South Africa or any other 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 exercised, offered, sold, resold, delivered or otherwise transferred, directly or indirectly, in or into the United States, except pursuant to an applicable exemption from, or in a transaction not subject to, the requirements of the Securities Act and in compliance with any applicable securities legislation in any state or other jurisdiction of the United States. The Company does not intend to register any offering in the United States or to conduct a public offering of securities in the United States.

Forward-looking statement

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", "deems", "intends", "estimate", "will", "may", "continue", "should" and similar expressions. This applies in particular to statements relating to future results, financial position, cash flow, plans and expectations of the Company's operations and management, future growth and profitability, general economic and regulatory environment and other factors affecting the Company, many of which are based on further assumptions, such as no changes in existing political, legal, fiscal, market or economic conditions or applicable law (including but not limited to accounting principles, accounting methods and tax policies), which may or may not be of importance to the Company results or its ability to operate. 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 its control. 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.

Potential investors should therefore not attach undue confidence to the forward-looking information herein, and potential investors are urged to read the parts of the prospectus that include a more detailed description of factors that may affect the Company's operations and the market in which the Company operates.

The information, opinions and forward-looking statements contained in this announcement speak only as at its date and could be subject to change without notice.