Glaston secures long-term financing
GLASTON CORPORATION, Stock Exchange Release, 25.2.2011 at 11.00 (EET)
Glaston secures long-term financing
Glaston Corporation (the “Company” or “Glaston”) has signed today the financing package to provide approximately EUR 84 million to refinance its current short-term syndicated loan facility, to increase its financial flexibility and to strengthening its equity. The financing package is comprised of the following elements:
EUR 73.7 million will be provided in the form of secured senior debt from Pohjola Bank plc, Nordea Bank Finland Plc, Pohjola Bank plc and Sampo Bank plc. The syndicated loan facility has a maturity of three years and the loan agreement includes typical financial covenants. Payment of dividend will be conditional on net financial debt to EBITDA ratio of less than 2.75. These restrictions do not apply to statutory dividends. Glaston's largest shareholders Oy G.W.Sohlberg Ab and GWS Trade Oy have also separately agreed not to claim minority dividends as regulated in Chapter 13 Section 7 of the Finnish Companies Act.
Approximately EUR 6 million will be provided by issuing new shares in Glaston and EUR 4.0 million in junior debt with maturity of three years.
The Board of Directors of Glaston has resolved by virtue of the authorization granted by the Annual General Meeting on 13 April 2010 to conduct a directed share issue and to offer a maximum number of 6.8 million new shares for subscription against payment to experienced and professional Finnish investors.The share issue in its entirety has been underwritten. Among others, Varma Mutual Pension Insurance Company ("Varma") and Finnish Industry Investment Ltd. have provided undertakings to the Company to subscribe for the shares.
The subscription price for each share issued in the directed issue is the trade volume-weighted average price of the Glaston share less 4.9 per cent for a time period of five days preceding the payment date, i.e. 28 February 2011. New shares issued in the directed share issue will be registered in the Trade Register on or about 4 March 2011 and trading in the Main market of NASDAQ OMX Helsinki Ltd will commence on or about 7 March 2011.
The Company has filed an application to the Finnish Financial Supervisory Authority to be granted an exempt from a duty to release a prospectus when an admission for the Main market is applied for the new shares subscribed in the directed share issue.
The terms and conditions of the directed share issue are attached to this stock exchange release.
Glaston has also entered into agreement with Varma and Finnish Industry Investment Ltd. on conversion of Glaston Convertible Loan held by them into shares in Glaston with the conversion rate EUR 1.30 determined in the terms and conditions of the Convertible Loan. Thus the amount of the Convertible Loan held by Varma, EUR 9.0 million, and Finnish Industry Investment, EUR 6.25 million, in total EUR 15.25 million, will be converted into 11,730,768 shares in Glaston. To compensate Varma and Finnish Industry Investment Ltd. for the difference of conversion rate and recent share price trading level, Glaston has agreed to provide the investors 21 cents per share as additional consideration. This offer will be extended to all Convertible Loan investors. The total issued amount of Convertible Loan is EUR 30 million.
The converted amount of the convertible bond will be recorded in reserve for invested unrestricted equity. In accordance with IAS 32, the compensation to Varma and Finnish Industry Investment Ltd related to the conversion of the bond will result in approximately EUR 2.5 million financial expense. However, the expense has no effect on Glaston’s equity.
The Board of Directors intends to propose the Annual General Meeting to be held on 5 April 2011 to authorise the Board of Directors to issue new shares. As a part of contemplated authorisation, the new shares may be issued without payment for the purpose of aforementioned compensation for the Convertible Loan investors. Glaston's largest shareholders Oy G.W.Sohlberg Ab and GWS Trade Oy have separately agreed that they will support the proposal of the share issue without payment at the Annual General Meeting.
Pohjola Corporate Finance Ltd. has acted as financial advisor to Glaston Corporation in structuring and negotiation of the financing package.
"This syndicated loan facility will allow Glaston to increase its financial flexibility and to refinance its current short-term loans. Additional funds and agreed conversion of Convertible Loan will support Glaston's growth strategy and strengthen its financial position," says Arto Metsänen, President and CEO of Glaston Corporation.
For further information, please contact
Arto Metsänen, President and CEO, phone +358 10 500 6100
Tapio Engström, CFO, Glaston Corporation, tel: +358 10 500 6419.
Glaston Corporation
Arto Metsänen
President and CEO
Glaston Corporation
Glaston Corporation is an international glass technology company and a pioneer of glass processing technology.Its product range and service network are the widest in the industry. Glaston's well–known brands are Bavelloni in pre-processing machines and tools, Tamglass and Uniglass in safety glass machines, and Albat+Wirsam in glass industry software.
Glaston's share (GLA1V) is listed on the NASDAQ OMX Helsinki Small Cap List.
Distribution: NASDAQ, OMX, key media, www.glaston.net
This release is not for publication, release or distribution, directly or indirectly, either in full or partially, in or into the United States, Canada, Australia, Japan or any other jurisdiction in which the same would be unlawful. This release is not a direct or indirect offer of securities in the United States, Canada, Australia, Japan or any other jurisdiction in which the same would be unlawful or would require prospectus, any related registration or any other actions according to applicable rules of that jurisdiction. Securities may not be sold in the United States absent registration with the United States Securities and Exchange Commission or an exemption from registration under the U.S. Securities Act of 1933, as amended. Glaston Corporation has not registered, and does not intend to register any part of the offering in the United States or to conduct a public offering of securities in the United States.
This release does not constitute an offer of any securities in the United Kingdom. No prospectus has been approved nor will be applied for approval or be approved for publication in the United Kingdom and hence, this release shall not cover offering of securities in the United Kingdom.
APPENDIX
DIRECTED SHARE ISSUE OF GLASTON CORPORATION
TERMS AND CONDITIONS OF THE DIRECTED SHARE ISSUE
The Board of Directors of Glaston Corporation (the “Company” or “Glaston”) has resolved by virtue of the authorization granted by the Annual General Meeting of Shareholders on 13 April 2010 that the Company shall offer a maximum of 6,800,000 new shares for subscription by a directed share issue on the following terms and conditions:
1 NUMBER OF SHARES AND SUBSCRIPTION RIGHT
A maximum of 6,800,000 new shares (the “Shares”) shall be offered for subscription. All the Shares are offered for in deviation from the shareholders’ pre-emption rights to experienced and professional Finnish investors as decided by the Board of Directors.
2 SUBSCRIPTION PRICE AND ITS ENTRY INTO BALANCE SHEET
The subscription price of one Share is the trade volume-weighted average price of the Glaston share less 4.9 per cent for a time period of five days preceding the payment date of the Shares. The subscription price shall be recorded in full as an increase in reserve for invested unrestricted equity.
3 SUBSCRIPTION PERIOD
The subscription period is on 25 February 2011. The subscription of Shares shall take place at a location determined by the Board of Directors of the Company. The Board of Directors of the Company has the right to extend the subscription period.
4 TERMS OF PAYMENT
The subscription price shall be paid in full to the Company’s bank account on 28 February 2011 at the latest. The Board of Directors of the Company may extend the payment period for subscription price of the Shares if necessary.
5 RIGHT TO DIVIDEND AND OTHER RIGHTS
The Shares entitle to dividend and other rights in the Company as from the registration of the new Shares. The Shares will be issued in the Finnish book-entry system.
6 REASONS FOR DEVIATING FROM THE SHREHOLDERS’ PRE-EMPTION RIGHTS
The pre-emption rights of the shareholders are deviated from since the purpose of the share issue is to strengthen the Company’s capital structure and to ensure the positive development according to the Company’s strategy.
There are thus weighty financial reasons from the Company’s perspective for deviating from the pre-emption rights of the shareholders as referred to in Chapter 9, Section 4 of the Finnish Companies Act.
7 OVER AND UNDER SUBSCRIPTION
In a possible over subscription situation the Company's Board of Directors shall decide on the applied procedure. In an under subscription situation the Board of Directors of the Company may decide who will be entitled to subscribe for the Shares that have been unsubscribed for, and the procedure to be applied in such subscription.
The Board of Directors of the Company shall decide on the approval of the Share subscriptions in accordance with these Terms and Conditions.
8 OTHER ISSUES
The Board of Directors of the Company shall decide on other issues related to the directed share issue and the practical arrangements resulting therefrom.