THE TERMS FOR KARO PHARMA’S RIGHTS ISSUE HAVE BEEN DETERMINED

Not for release, publication or distribution, directly or indirectly, in or into Australia, Hong Kong, Japan, Canada, New Zealand, South Africa, Switzerland, Singapore, the United States or any other jurisdiction where such distribution of this press release would be subject to legal restrictions. This press release does not constitute an offer of any securities of Karo Pharma AB. See also section “IMPORTANT INFORMATION” below.

The Board of Directors of Karo Pharma AB (“Karo Pharma” or the “Company”) has determined the terms for the Company’s rights issue which was resolved and announced on 4 April 2018. The rights issue is subject to approval by the Annual General Meeting on 3 May 2018.

Summary

• For each existing share held at the record date, shareholders will receive one (1) subscription right. Two (2) subscription rights entitling the holder to subscribe for one (1) ordinary new share (i.e. a subscription ratio of 1:2)
• The subscription price has been set at SEK 24.00 per share, implying that the rights issue will at most raise SEK 1,314.7 million before issue costs, by issuance of a maximum of 54,777,594 new ordinary shares, resulting in a maximum increase of the Company’s share capital of SEK 21,910,796.36
• The Chairman of the Board, Anders Lönner, and members of the Board, Per-Anders Johansson and Håkan Åström as well as nomination committee member and shareholder Leif Edlund, which together represents approximately 17.8 percent of the share capital and the votes in the Company, have committed to subscribe for their respective pro rata-shares in the rights issue. The remaining part of the rights issue is guaranteed by Anders Lönner, Leif Edlund and Håkan Åström
• The rights issue is subject to the approval by the Annual General Meeting on 3 May 2018
  

Terms of the rights issue

For each existing share held at the record date, shareholders will receive one (1) subscription rights. Two (2) subscription rights entitling the holder to subscribe for one (1) ordinary new share (i.e. a subscription ratio of 1:2).Subscription will also be possible without the exercise of subscription rights.

The record date of Euroclear Sweden AB for determining the registered shareholders that are entitled to obtain subscription rights is 9 May 2018. The shares will be traded with the right to participate in the rights issue until 7 May 2018 and without the right to participate in the rights issue as of 8 May 2018.

The subscription price has been set at SEK 24.00 per share, implying that the rights issue will at most raise SEK 1,314.7 million before issue costs, by issuance of a maximum of 54,777,594 new ordinary shares, resulting in a maximum increase of the Company’s share capital of SEK 21,910,796.36.

The subscription period will run between 14 May 2018 until 29 May 2018. Karo Pharma’s Board of Directors entails the right to extend the subscription period. An extension of the subscription period will be announced on 29 May 2018 at the latest.

Shareholders who decide not to participate in the rights issue will have their ownership share diluted by approximately 33 percent, but has the possibility to get financially compensated for the ownership dilution by selling their subscription rights.

The rights issue is subject to the approval by the Annual General Meeting on 3 May 2018. Notice to the Annual General Meeting was published on 4 April 2018 and is available on Karo Pharma’s website.

Subscription undertakings and declaration of intents

The Chairman of the Board, Anders Lönner, and members of the Board, Per-Anders Johansson (through his company Nomic AB) and Håkan Åström as well as nomination committee member and shareholder Leif Edlund, which together represent approximately 17.8 percent of the share capital and the votes in the Company, have committed to subscribe for their respective pro rata-share of the rights issue and also committed to support the rights issue at the Annual General Meeting. As to the amount not covered by the subscription undertakings from Anders Lönner, Per-Anders Johansson, Håkan Åström and Leif Edlund, the Company has entered into guarantee agreements on customary terms with Anders Lönner, Leif Edlund and Håkan Åström (the “Guarantors”), according to which the Guarantors have committed to subscribe for the shares that are not subscribed nor paid for in the rights issue, up to the maximum amount of the rights issue, with deductions of the amounts that is covered by the subscription undertakings. For the Guarantors’ guarantee of in total approximately 82.2 percent of the rights issue, of which Leif Edlund guarantees SEK 350 million, Håkan Åström guarantees SEK 50 million and Anders Lönner guarantees the remaining part of the rights issue that is not subject to subscription undertakings, the Guarantors will receive a compensation of 2.5 percent of each Guarantor’s guaranteed amount. Accordingly, the rights issue in full is subject to subscription undertakings or guarantees. The subscription undertakings and guarantees of the rights issue have not been assured through pledge, bank guarantee or any similar arrangements

Indicative timetable

Important information about LEI and NID at subscription without subscription rights

According to MiFID II and starting from 3 January 2018, all investors must have a global identification code in order to conduct a securities transaction. These regulations require legal entities to apply for registration of a Legal Entity Identifier (LEI code) and natural persons need to find their National ID or National Client Identifier (NID number) in order to subscribe for new shares in the Company without subscription rights. Please note that it is the shareholder's legal status that determines whether a LEI code or NID number is required, and that Swedbank may be prevented from performing the transaction on behalf of the person in question if a LEI code or NID number (as applicable) is not provided. Legal persons who need to obtain a LEI code may contact one of the suppliers available on the market. Through this link approved institutions for the global LEI system can be found: www.gleif.org/en/about-lei/how-to-get-an-lei-find-lei-issuing-organizations. For natural persons who only have Swedish citizenship, the NID number consists of the designation "SE" followed by the person's social security number. If the person in question has more or anything other than Swedish citizenship, the NID number may be any other type of number.

Remember to apply for registration of a LEI code (legal persons) or find out the NID number (natural persons) in good time since this information is required in the application form upon subscription without subscription rights.

Financial and legal advisors

SEB Corporate Finance and Swedbank Corporate Finance are Joint Global Coordinators and Hamilton Advokatbyrå is legal advisor to Karo Pharma in relation to the rights issue.

FOR ADDITIONAL INFORMATION, PLEASE CONTACT:

Peter Blom, CEO, +46 (0) 70-655 56 98 or peter.blom@karopharma.se
Camilla Lönn, CFO, 076-002 60 10 or camilla.lonn@karopharma.se   

ABOUT KARO PHARMA

Karo Pharma is a Specialty Pharmaceutical company, which develops and markets products for pharmacies as well as directly to the healthcare sector. Karo Pharma is listed on Nasdaq Stockholm Mid Cap.                

This information is information that Karo Pharma AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the above contact person´s agency, at 16:30 CEST on 30 April 2018. This press release is also available at www.karopharma.se and www.newsroom.cision.com.

IMPORTANT INFORMATION

The information in this press release does not contain or constitute an offer to acquire, subscribe or otherwise trade in shares, subscription rights or other securities in Karo Pharma AB. Any invitation to the persons entitled to subscribe for shares in Karo Pharma AB is made solely through the prospectus which Karo Pharma AB estimates to publish on or around 11 May 2018.

This press release may not be released, published or distributed, directly or indirectly, in or into Australia, Hong Kong, Japan, Canada, Singapore, the United States or any other jurisdiction where such action is wholly or partially subject to legal restrictions or where such action would require additional prospectuses, registrations or other actions in addition to what follows from Swedish law. Nor may the information in this press release be forwarded, reproduced or disclosed in a manner that contravenes such restrictions or would entail such requirements. Failure to comply with this instruction may result in a violation of applicable securities laws.

No subscription rights, BTAs (interim shares) or new shares have or will be registered under the United States Securities Act of 1933 (“Securities Act”) or securities legislation in any state or other jurisdiction in the United States and may not be offered, subscribed, used, pledged, sold, resold, allotted, delivered or transferred, directly or indirectly, into or within the United States, other than pursuant to an exemption from, or in a transaction that is subject to, the registration requirements of the Securities Act. The offering is not aimed for individuals with residence in Australia, Hong Kong, Switzerland, and Singapore nor in any other jurisdiction where participation would require additional prospectus, registration or other arrangements aside of the Swedish law system.