HKScan is planning a share issue to strengthen its financial position and capital structure

HKScan Corporation  Inside information 8 May 2019 7:45 am EEST

HKScan is planning a share issue to strengthen its financial position and capital structure

Not for publication or distribution, directly or indirectly, in or into Australia, South Africa, Hong Kong, Japan, Canada or the United States of America or in any other jurisdiction in which publishing or distributing would be prohibited by applicable law

HKScan Corporation (”HKScan” or ”Company”) is planning a share issue to secure the Company’s financial position and to strengthen its capital structure. The planned share issue is intended to provide a strong foundation for developing the Company’s business portfolio and balancing the Company’s financial situation and for building future growth.

The Board of Directors of the Company has decided to convene an extraordinary general meeting to be held on Wednesday, 29 May 2019, to authorize the Board of Directors to implement a financing arrangement which would consist of a share issue of up to EUR 60 million (expected), where:

  • In exchange for cash consideration, new series A shares would be offered for subscription to the public in Finland.
  • New series A shares would be offered to institutional investors in the EEA. The subscription price of the shares could be paid at the option of the investor either in cash or by bonds issued by the Company (at their nominal value and together with accrued interest).
  • In the event of over-subscription, the Board of Directors would be entitled to increase the size of the share issue by a maximum of EUR 12 million. In addition, in the event of over-subscription, the Board of Directors would be entitled to allocate series A shares to the subscribing shareholders of the Company before allocating to subscribers who are not shareholders of the Company.

The Company has, by 8 May 2019, received EUR 54.8 million in commitments from current shareholders and institutional investors to subscribe for new series A shares. The commitments have at their lowest been given for a subscription price per share not exceeding EUR 1.60. The commitments are subject to certain conditions.

The Company plans to publish a prospectus regarding the shares to be offered in the share issue on or about 31 May 2019.

In addition to the planned share issue, the Company is negotiating of a new financing agreement and a maturity extension with its current creditors, to enter into force if certain conditions, including the share issue, are met.

“The planned financing arrangement would significantly strengthen the company’s financial position. HKScan is in the middle of a turnaround, and we are focusing on improving the company’s cash flow and profitability according to plan. In addition to balancing the company’s financials in the short term, we are actively assessing the Company’s business portfolio and updating HKScan’s strategy, with the help of which we aim to restore the company’s path towards profitable growth”, HKScan’s CEO Tero Hemmilä states.

Alexander Corporate Finance Ltd acts as the Company’s financial advisor and the lead manager of the share issue. Krogerus Attorneys Ltd acts as the legal counsel to HKScan.

HKScan Corporation

Board of Directors

For more information please contact: HKScan Media Service Desk +358 10 570 5700 or by email to: communications@hkscan.com

HKScan is a Nordic meat and meals company. We employ nearly 7 200 professionals in striving to serve the world´s most demanding consumers, maintaining quality throughout the full chain of operations, From Farm to Fork. HKScan produces, markets and sells high-quality, sustainably produced pork, beef, poultry and lamb products, as well as charcuterie and meals, with strong consumer brands, including HK®, Scan®, Rakvere®, Kariniemen®, Rose®, Pärsons® and Tallegg®. Our customers are the retail, food service, industrial and export sectors, and our home market comprises of Finland, Sweden, Denmark and the Baltics. We export to close to 50 countries. In 2018, HKScan had net sales of EUR 1.7 billion.

Important Remark

Not for publication or distribution, directly or indirectly, in or into Australia, South Africa, Hong Kong, Japan, Canada or the United States of America or in any other jurisdiction in which publishing or distributing would be prohibited by applicable law.

This release is not a prospectus and not an offer relating to securities. No offer will be made in any such jurisdiction in which the offer or participation therein would be unlawful. No offer will be made in any such jurisdiction other than Finland in which the offer would require the preparation of a prospectus, registration or any other similar action. The lead manager is acting exclusively for the Company and no one else connected to the possible share issue. The lead manager will not be responsible to anyone other than the Company for providing the protections afforded to its clients nor for giving advice in relation to the contents of this release or the possible transaction pursuant to this release.

This release is directed only to (A) persons who are outside the United States of America; (B) (i) persons who are resident in a Member State of the European Economic Area (other than Finland) and are a qualified investor (within the meaning of Article 2(1)(e) of Directive 2003/71/EC and any relevant implementing measure in each Member State of the European Economic Area); or (ii) persons who are resident in Finland; and (C) as regards Great Britain, (i) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); (ii) high net worth entities; and (iii) and other persons to whom it may lawfully be communicated, falling within Article 49(2) of the Order (all such persons together being referred to as "Relevant Persons"). Any shares offered in the possible share issue or requests, offers or agreements relating to the subscription for, purchase of or any other acquisition of such shares are intended to be made available to Relevant Persons only. No one who is not a Relevant Person shall act on the basis of this release.

This release does not constitute an offer for sale of securities in the United States. The shares may not be offered or sold within the United States absent of registration or an exemption under the U.S. Securities Act 1933 (as amended). The Company has not registered and it does not intend to register, any portion of the offering in the United States, and it does not intend to conduct a public offering in the United States.

This release contains forward-looking statements. These forward-looking statements are not based on historical facts, but are statements about future expectations. Statements included in this release which contain expressions "considers", "aims", "anticipates", "assumes", "believes", "estimates", "expects", "intends", "may", "plans", "should", and other similar expressions related to the Company or the possible share issue are examples of such forward-looking statements. Other forward-looking statements can be identified in the context in which the statements are made. Forward-looking statements contain information about future results, plans or expectations regarding the Company's business operations, including its strategy and growth plans and profitability, and the general economic situation. These forward-looking statements are based on current plans, estimates, prospects and expectations. They are based on certain currently valid expectations that may however turn out to be wrong. These forward-looking statements are based on assumptions and they contain several risks and uncertainties. Investors should not rely on these forward-looking statements. Several factors may result in a material deviation of the Company's actual business outcome or financial standing from the business outcome or financial standing that is indicated or referred to in forward-looking statements. The absence or occurrence of the aforementioned factors may cause a substantial deviation of the Company's actual business outcome or financial standing from what is directly or indirectly presented or described in the sections, which include forward-looking statements. Because of risks, uncertainties, assumptions and other factors, events described in forward-looking statements may not necessarily occur. Therefore, the accuracy and completeness or the occurrence of the predicted events of the forward-looking statements presented in this release cannot be guaranteed.

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About Us

HKScan is a Nordic meat and meals company. We employ over 7 300 professionals in striving to serve the world ìs most demanding consumers, maintaining quality throughout the full chain of operations, From Farm to Fork. HKScan produces, markets and sells high-quality, sustainably produced pork, beef, poultry and lamb products, as well as charcuterie and meals, with strong consumer brands, including HK®, Scan®, Rakvere®, Kariniemen®, Rose®, Pärsons® and Tallegg®. Our customers are the retail, food service,industrial and export sectors, and our home market comprises of Finland, Sweden, Denmark and the Baltics. We export to close to 50 countries. In 2017, HKScan had net sales of EUR 1.8 billion, making us one of Europe’s leading meat and meals companies.www.hkscan.com

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