Elkem ASA – Contemplated private placement of up to approx. 56.5 million new shares

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Oslo, 26 April 2021

Elkem ASA ("Elkem" or "the Company") announces a private placement of up to approx. 56.5 million new shares (the "New Shares") (the "Private Placement").

The net proceeds from the issuance of the New Shares in the Private Placement will be used to further strengthen the capacity to invest in growth initiatives to capture attractive silicones opportunities in line with Elkem’s strategy, including the announced expansion project in Xinghou, as well as for general corporate purposes.

The Company has retained ABG Sundal Collier ASA ("ABG") and Morgan Stanley & Co. International plc as joint bookrunners in connection with the Private Placement (jointly the "Managers").

The Private Placement will be directed towards Norwegian and international investors, subject to applicable exemptions from relevant registration, filing and prospectus requirements, and subject to other applicable selling restrictions. The minimum application and allocation amount have been set to the NOK equivalent of EUR 100,000. The Company may however, at its sole discretion, allocate New Shares for amounts below EUR 100,000 to the extent exemptions from the prospectus requirements in accordance with applicable regulations, including the Norwegian Securities Trading Act and ancillary regulations, are available.

The offer price in the Private Placement will be determined by the board of directors of the Company (the "Board") following an accelerated bookbuilding process. The bookbuilding period for the Private Placement commences today, on 26 April 2021 at 16:30 CEST and is expected to close on 27 April 2021 at 08:00 CEST. The Company, after consultation with the Managers, reserves the right to at any time and in its sole discretion close or extend the bookbuilding period or to cancel the Private Placement in its entirety and for any reason. If the bookbuilding is shortened or extended, the other dates referred to herein may be changed correspondingly. 

The Board has proposed that the Company's annual general meeting to be held on 27 April 2021 (the "AGM") resolves a dividend of NOK 0.15 per share (please see the Company's announcement made on 10 February 2021 for practical information relating to the proposed dividend). The shares allocated in the Private Placement will carry the right to receive such dividend, provided that the dividend is resolved by the AGM.

Completion of the Private Placement by delivery of the New Shares is subject to (i) the approval by the Board of the Private Placement including the Board resolving to issue the New Shares pursuant to an authorisation to increase the share capital granted by the Company's annual general meeting held on 8 May 2020, (ii) the placement agreement entered into by the Joint Bookrunners and the Company on 26 April 2021 not being terminated by the Managers in accordance with the terms thereof.

The Company reserves the right to cancel, and/or modify the terms of, the Private Placement at any time and for any reason prior to delivery of the New Shares. Neither the Company nor the Managers will be liable for any losses incurred by investors if the Private Placement is cancelled and/or modified, irrespective of the reason for such cancellation.

Allocation of the shares in the Private Placement will be determined after the expiry of the bookbuilding period, and the final allocation will be made by the Board at its sole discretion, following advice from the Managers. Delivery versus payment settlement of the New Shares will be facilitated by existing and unencumbered shares in the Company being borrowed by ABG (on behalf of the Managers) from Bluestar Elkem International Co. Ltd S.A pursuant to a share lending agreement between such parties and the Company. The shares will thus be tradable from allocation. The Managers will settle the share loan with new shares in the Company to be issued by a resolution of the Board pursuant to an authorisation granted by the annual general meeting held on 8 May 2020.

The Company will announce the exact number of New Shares to be issued in the Private Placement through a stock exchange notice expected to be published before opening of the trading on Oslo Stock Exchange on 27 April 2021.  

Subject to completion of the Private Placement, the Company has agreed to a 90 days lock-up for the Company, subject to customary exemptions as well as relating share issuance under employee stock option and management remuneration plans.

The Board has considered the structure of the contemplated capital raise in light of the equal treatment obligations under the Norwegian Public Limited Companies Act, the Norwegian Securities Trading Act and the rules on equal treatment under Oslo Rule Book II for companies listed on the Oslo Stock Exchange and the Oslo Stock Exchange's Guidelines on the rule of equal treatment, and is of the opinion that the proposed Private Placement is in compliance with these requirements. By structuring the transaction as a private placement, the Company will be in a position to raise capital in an efficient manner, with a lower discount to the current trading price and with significantly lower completion risks compared to a rights issue. In addition, the Private Placement is subject to marketing through a publicly announced bookbuilding process and a market-based offer price should therefore be achieved. The Board also aims to widen and strengthen the Company's shareholder base by completing the transaction as a private placement. Furthermore, the number of New Shares to be issued in connection with the contemplated Private Placement will imply a limited dilution of existing shareholders. On this basis and based on an assessment of the current equity markets, the Board has considered the Private Placement to be in the common interest of the Company and its shareholders. As a consequence of the private placement structure, the shareholders' preferential rights to subscribe for the New Shares will be deviated from.

Advokatfirmaet Thommessen AS is acting as legal advisor to the Company in connection with the Private Placement and Advokatfirmaet Schjødt AS is acting as the Norwegian legal advisor to the Managers.

For further information, please contact:
Odd-Geir Lyngstad, VP Finance & Investor Relations
Tel: +47 976 72 806
Email: odd-geir.lyngstad@elkem.no

Fredrik Norman, VP Corporate Communication and Public Affairs
Tel: +47 918 66 567
Email: fredrik.norman@elkem.no

This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

IMPORTANT INFORMATION:

These materials do not constitute an offer of securities for sale or a solicitation of an offer to purchase securities of the Company in the United States or any other jurisdiction. The securities of the Company may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"). The securities of the Company have not been, and will not be, registered under the U.S. Securities Act. Any sale in the United States of the securities mentioned in this communication will be made solely to "qualified institutional buyers" as defined in Rule 144A under the U.S. Securities Act. No public offering of the securities will be made in the United States. In any EEA Member State, this communication 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. The expression "Prospectus Regulation" means Regulation (EU) 2017/1129 (together with any applicable implementing measures in any Member State).

In the United Kingdom, this communication is only addressed to and is only directed at Qualified Investors who (i) are investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order") or (ii) are persons falling within Article 49(2)(a) to (d) of the Order (high net worth companies, unincorporated associations, etc.) (all such persons together being referred to as "Relevant Persons"). These materials are directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this announcement relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.

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 "anticipate", "believe", "continue", "estimate", "expect", "intends", "may", "should", "will" and similar expressions. The forward-looking statements in this 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 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. The information, opinions and forward-looking statements contained in this announcement speak only as at its date and are subject to change without notice. This announcement is made by and is the responsibility of, the Company. The Managers are acting exclusively for the Company and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, or for advice in relation to the contents of this announcement or any of the matters referred to herein. Neither the Managers nor any of their respective affiliates makes any representation as to the accuracy or completeness of this announcement and none of them accepts any responsibility for the contents of this announcement or any matters referred to herein.

This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities of the Company. Neither the Managers nor any of their respective affiliates accepts any liability arising from the use of this announcement.

This announcement 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 prospectuses to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (as amended) as implemented in any Member State. Each of the Company, the Managers and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any statement contained in this announcement whether as a result of new information, future developments or otherwise. The distribution of this announcement and other information may be restricted by law in certain jurisdictions. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.