EcoRub AB enters into a financing agreement with European High Growth Opportunities Securitization Fund
EcoRub AB (publ) has entered into a financing agreement with European High Growth Opportunities Securitization Fund (the “Investor”), a Luxembourg fund advised by Alpha Blue Ocean Inc., regarding a financing solution based on the issuance of convertible bonds with warrants attached. The financing solution means that the Company is able, over a 18-month period, to receive up to SEK 20 million and potentially up to an additional SEK 7 million if all the warrants issued are exercised.
EcoRub AB (the “Company”) has entered into the financing agreement in order to secure financing for the Company (the “Agreement”). This financing is expected to provide the Company with funding for the next 18 months, it being specified that SEK 10 million are due within the next 12 months.
The annual general meeting held on June 21, 2018 empowered the Board of Directors to issue these convertibles and warrants.
Åke Paulsson, the Company’s CEO, says: “This financing solution fits our current financing needs very well. The solution is both cost-effective and flexible for the Company and our shareholders. It gives us financial stability for the next 18 months and the opportunity to finance the final establishment of our laboratory and purchase of the production equipment that are planned for the coming year”.
Pierre Vannineuse, CEO and founder of London-based Alpha Blue Ocean Investment Group and Head of European High Growth Opportunities Securitization Fund, comments: “We are thrilled to welcome EcoRub within our portfolio companies. This transaction is part of Alpha Blue Ocean’s larger intention to deploy within the next twenty-four months EUR 2 billion of funds in leading European junior clean tech companies.
We are convinced that now that the financing of the Company is secured over a long period, the management will be able to focus on delivering the results we expect from the Company’s very promising development of a hybrid material consisting of recycled polymers from plastics and tyres.”
Main terms and conditions
The financing solution is based on the issuance of convertible bonds and warrants which will entitle the Investor to subscribe for class B shares of the Company, upon conversion of the convertible bonds and exercise of the warrants.
The financing shall take place over a period of eighteen months. During this period, the Company shall be able to receive up to SEK 20 million through the issuance of one tranche of convertible bonds of SEK 5 million and six tranches of convertible bonds of SEK 2,5 million, with warrants attached.
In connection with each tranche, warrants will be issued entitling the Investor to subscribe for class B shares of the Company, upon their exercise. Should all the warrants to be issued under the total commitment be exercised, an additional SEK 7 million will be received by the Company (i.e. an additional 35 percent of the total commitment). All in all, this means that the Company may receive up to SEK 27 million.
The convertible bonds must be converted into class B shares within 12 months from their respective date of issuance. The warrants must be exercised within five years from their actual date of issuance. The convertible bonds will be issued at a subscription price corresponding to their nominal value.
The conversion rate for the convertible bonds and the strike price for the warrants are determined based on a Pricing Period of 15 trading days immediately preceding a reference date.
The convertible bonds will have to be mandatorily converted at a conversion price corresponding to 93 % (or 95% for the convertible bonds of the first tranche) of the lowest closing VWAP (volume weighted average price) observed during the 15 trading days prior the receipt of a conversion request.
The exercise price of the warrants will be calculated, for each tranche, as 120 % of the VWAP observed during the 15 trading days prior to the trading day on which the Company requests the Investor to subscribe to a new tranche. However, it is specified that regarding the first tranche, the exercise price of the warrants shall be equal to 120% of the lower between SEK 0.3631 and the lowest closing VWAP during the 15 trading days prior to the request to issue the first tranche.
If the total commitment is utilized, i.e. convertible bonds amounting to SEK 20 million in aggregate nominal value, the costs of the Company for, inter alia, financial and legal services, will amount to approximately 6 percent of the total commitment.
Bracknor Fund Ltd
As the Company considers that this new financing offers better commercial terms, the Company has no intention to drawdown, at its sole discretion, any additional tranches remaining under the agreement entered into between the Company and Bracknor Fund Ltd, [it being specified that Bracknor Fund Ltd still has the right to request the issuance of two tranches of convertible bonds with warrants attached according to such agreement].
About European High Growth Opportunities Securitization Fund (EHGO)
European High Growth Opportunities Securitization Fund is an institutional investment company based in Luxembourg which focuses on financing innovative companies in Europe that are deemed to be significantly undervalued. Alpha Blue Ocean is the exclusive advisor to EHGO. Their mandate is to invest in innovative European companies, thereby supporting their needs for growth capital by providing a credible European funding option.
About Alpha Blue Ocean Investment Group
Alpha Blue Ocean, founded by Pierre Vannineuse, is responsible for a family of investments and operates across multiple jurisdictions and focuses on financing innovative technologies while retaining a passive role in the management of its portfolio companies. Alpha Blue Ocean specialises in providing flexible and innovative non-Invasive Loans and Equity-financing to listed companies globally and in health, energy, mining and technology. Alpha Blue Ocean's head office is based in London, United Kingdom.
This information is such that EcoRub AB is required to make public in accordance with the EU’s market abuse regulation (MAR) and the Swedish Securities Market Act. The information was made available public by the Company’s contact person on October 8, 2018.
Åke Paulsson
Vd
+46 70 66 34 174
EcoRub AB (publ):
EcoRub is a cleantech company. The company has a hybrid material TPRR - ThermoPlastic Recycled Rubber- which is patented. We mix thermoplasts, rubber powder, copolymers and sometimes organic fibres as wood dust or straw to make a new material - ecological rubber - with unique performance. The properties are among other excellent weatherability, stress performance and the material can easily be recycled. The material is used for injection moulding with equipment used in plastics industry. We can also process the material to sheets and mats.