Update regarding discussions of underwriting and adjusted loan terms

A group of larger holders of convertible loans led by Tedde Jeansson (the “Group of Investors”) is together with Pareto (who is acting on behalf of Eniro) working towards arranging a group of underwriters in order to secure that the cash issue of SEK 275 million is fully subscribed, provided that the bank consortium accept certain adjustments of the loan terms that have been presented in conjunction with the Company´s recapitalization plan. The banking consortium and the Group of Investors has reached a consensus regarding the adjustments of the interest rate and amortisations if the entire cash issue of SEK 275 million is fully underwritten.  The board of directors of Eniro is positive to the proposed adjustments which the banking consortium and the Group of Investors have reached a consensus on. No binding commitments from the Company, Group of Investors, other underwriters or the banking consortium exist today. The adjusted loan terms are contingent on, among other things, final approval from each respective banks credit committee and that a complete group of underwriters is arranged. Eniro intends to announce further information as soon as credit committee approval and/or a complete group of underwriters have been finalized.

Background to the underwriting

According to the current recapitalization plan the banks will write off bank loans corresponding to the amount subscribed for in the cash Issue. For the part of the cash issue that is not subscribed for, the banks will convert bank loans into ordinary shares instead of a write off of bank loans. If no shares are subscribed for in the cash issue, the banks will thus receive shares corresponding to SEK 550 (2x275) million from this part of the Recapitalization.

If a group of underwriters and a credit committee approval regarding adjusted loan terms is achieved, the full subscription of the cash issue will be secured, which will consequently mean that:

-          Eniro’s cash flow is further improved, stemming from adjusted loan terms.

-          The dilution effect from the banks’ conversion undertakings in the cash issue is limited.

-          The banks will write off SEK 275 million of loans rather than converting the amount to ordinary shares, which also limits dilution.

The underwriting as described above would entail compensation to the underwriters corresponding to 10 percent to be paid in newly issued shares at market price.

Discussed adjustments of Eniro’s loan terms

The banking consortium and the Group of Investors have reached a consensus about the following adjustments to interest rate and amortisations in exchange for that the entire cash issue of SEK 275 million is fully underwritten. An interest rate margin of 2.00 percent per quarter is paid on remaining bank loans. A further interest rate consisting of reference rate +4.00 percent PIK (interest is accrued and increases the loan amount) is to be paid in the case Eniro fails to pay the minimum extra amortisation (“MEA”) (defined below) at the end of each respective period. Such a PIK interest rate will be applicable from the start of the period in which the MEA has not been paid and will be applicable until Eniro have paid the MEA which is due for payment.

Additionally, mandatory amortisation shall be due according to the following schedule:

2018: SEK 20 million (SEK 5 million per quarter)

2019: SEK 20 million (SEK 5 million per quarter)

2020: SEK 80 million (SEK 20 million per quarter)

Eniro’s bank terms stipulates that cash or cash equivalents which exceed SEK 50 million is to be used for amortisation, and if Eniro makes additional amortisations (in excess of the mandatory amortisation) in accordance with the table below (MEA ref. above), or with a larger amount, it will entail a write off of bank loans according to the percentages below based on the amount which is amortised in excess of the mandatory amortisation.

If Eniro pays the combined MEA amount of SEK 92.5 million, or alternatively during the specified time period amortises in excess of the MEA amount, the write off that is corresponding to the applicable time period for such a repayment shall be applied to the total amount.

Additionally, Eniro shall receive a refinancing discount, in accordance with the table below, if the Company repays its loans in their entirety (all facilities, incl. RCF) and all the banks commitments in the loan agreement is cancelled. The calculation of nominal amount includes any accumulated PIK interest and add-back of any previous write offs made by the banks as a result of extra amortisations, as described above.

Financial impact as a result of the consensus which has been reached between the Group of Investors and the bank consortium regarding adjusted loan terms

As a result of the consensus which has been reached between the Group of Investors and the bank consortium regarding the adjusted loan terms, Eniro’s cash flow will be improved in comparison to the original loan terms previously communicated in the recapitalisation plan. Below table illustrates the differences in cash flow between the original agreement and the new agreement based on an illustrative loan amount of SEK 900 million after the recapitalization.

Acceptance level of the Exchange Offers

The Exchange Offers are conditional upon the acceptance of the Exchange Offers by both preference shareholders who together own at least 95 percent of all preference shares and holders of convertible loans who together hold at least 95 percent of the outstanding nominal amount[1]. As at 26 July 2017 the Exchange Offers had been accepted by preference shareholders with a total holding corresponding to approximately 73 percent of all outstanding preference shares and by holders of convertible loans with a total holding corresponding to approximately 57 percent of the outstanding nominal value of the convertible loans in Eniro. If the Group of Investors which earlier have waited to accept the Exchange Offers accepts, the acceptance level for the holders of convertible loans will increase by approximately 23 percentage points to approximately 80 percent of the outstanding nominal value of the convertible loans based on the acceptance level as at 26 July 2017.

If the required acceptance level is not achieved in the Exchange Offers, no amended loan agreement will enter into force. At the same time, the deferment according to the stand-still agreement will cease, which entails that the lending banks have the right to demand the immediate repayment of all outstanding loans. As Eniro lacks the funds to repay its loan obligations if immediate repayment was demanded, the board of directors intends to, in this eventuality, apply for a company reorganization at the district court. The current acceptance period for the exchange offers run until 25 August 2017.

Erneholm Haskel is financial advisor to Eniro regarding the recapitalization plans, together with the legal advisors Nord Advokater and Ramberg Advokater. Pareto Securities is Sole Manager and Gernandt & Danielsson Advokatbyrå is legal advisor to Eniro in relation to the Exchange Offers. Roschier Advokatbyrå is legal advisor to Pareto Securities.

 
For more information, please contact:

Björn Björnsson, Chairman of the board of directors, tel +46 70 399 80 16

Örjan Frid, President and managing director, tel +46 705 611 615

This information is information that Eniro AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 08.30 CET on 21 August 2017.

Eniro is a leading search company for individuals and businesses in the Nordic region. Eniro Group has approximately 1,700 employees. The company is listed on Nasdaq Stockholm [ENRO], with approximately 14,000 shareholders at present and is headquartered in Kista, Stockholm. More on Eniro at enirogroup.com, twitter.com/eniro, facebook.com/eniro.

Detta pressmeddelande finns tillgängligt på svenska på www.enirogroup.com/sv/pressmeddelanden.

 Important information

This press release does not contain or constitute an invitation or an offer to acquire, sell, subscribe for or otherwise trade in shares, subscription rights or other securities in Eniro. The invitation to subscribe for shares in Eniro will only be made through the prospectus that Eniro has published on its website, following the approval and registration thereof by the Swedish Financial Supervisory Authority and only to the persons to whom the prospectus is addressed. The prospectus contains, among other things, risk factors, financial statements as well as information regarding Eniro’s board of directors. This press release has not been approved by any regulatory authority and is not a prospectus. Accordingly, investors should not subscribe for or purchase any securities referred to in this press release except on the basis of information provided in the prospectus.

In certain jurisdictions, the publication or distribution of this press release may be subject to restrictions according to law and persons in those jurisdictions where this press release has been published or distributed should inform themselves about and abide by such restrictions.

This press release is not directed to persons located in the United States (including its territories and possessions, any state of the United States and the District of Columbia), Canada, Japan, Australia, Hong Kong, New Zealand, Singapore, South Africa or in any other country where the offer or sale of the subscription rights, paid subscribed shares or new shares is not permitted.

This press release may not be announced, published or distributed, directly or indirectly, in or into the United States, Canada, Japan, Australia, Hong Kong, New Zealand, Singapore, South Africa or any other country where such action is wholly or partially subject to legal restrictions or where such action would require additional prospectuses, other offer documentation, registrations or other actions in addition to what follows from Swedish law.

The information in this press release may not be forwarded, reproduced or disclosed in such a manner that would contravene such restrictions or would require such additional prospectuses, other offer documentation, registrations or other actions. Failure to comply with this instruction may result in a violation of the United States Securities Act of 1933, as amended (the “Securities Act”) or laws applicable in other jurisdictions.

No subscription rights, paid subscribed shares or new shares have been or will be registered under the Securities Act, or with any other securities regulatory authority of any state or other jurisdiction of the United States and no subscription rights, paid subscribed shares or new shares may be offered, sold, resold, transferred, delivered or distributed, directly or indirectly, into or within the United States or on the account of such persons other than pursuant to an exemption from, or in a transaction not subject to the registration requirements of the Securities Act, and in compliance with any applicable securities laws of any state or jurisdiction of the United States. No public offering of subscription rights, paid subscribed shares or new shares is made in the United States. There is no intention to register any securities referred to herein in the United States or to make a public offering in the United States.

This press release contains forward-looking statements which reflect Eniro’s current view on future events and financial and operational development. Words such as “intend”, “will”, “expect”, “anticipate”, “may”, “plan”, “estimate” and other expressions than historical facts that imply indications or predictions of future development or trends, constitute forward-looking statements. Forward-looking statements inherently involve both known and unknown risks and uncertainties as they depend on future events and circumstances. Forward-looking statements do not guarantee future results or development and the actual outcome could differ materially from the forward-looking statements.

The information, opinions and forward-looking statements in this press release speak only as of its date and are subject to change without notice.

[1] Eniro’s board of directors may, after obtaining approval from the lending banks and the group of underwriters, decide to carry out the Exchange Offers even at a lower acceptance level.