Nustay decides to carry out fully pre-subscribed and underwritten committed rights issue of shares and warrants, gives market update and publishes prospectus

Nustay A/S ("Nustay" or “the Company”) hereby announces that the Board of Directors, on the basis of the authorization from the Extraordinary General Meeting held on February 17th 2020, has decided to carry out a fully pre-subscribed and underwritten committed rights issue of shares and warrants (together referred to as “Units”) of an approximate initial amount of DKK 27.3 million (before issue costs). In addition, through the rights issue of Units, further warrants are planned to be issued, which may add a total of approximately DKK 22.8 million to Nustay. The total issue from both the rights issue and the warrants thus amount to approximately DKK 50.1 million (before total issue costs of approximately DKK 5.1 million and conversion of debt of in total approximately DKK 5.8 million). Nustay has received pre-subscription commitments of approximately DKK 13.3 million from its major shareholders, board members as well as external investors. The Company has also received underwriting commitments of approximately DKK 14 million. The pre-subscription commitments and underwriting commitments thus correspond to a total of 100 percent of the rights issue of Units. The overall objective of the capitalization is to finance further growth, rebuild the cash-buffer, and repay the Company’s outstanding debt. The company also informs that existing loan agreements have been re-negotiated.

Background:

Nustay recently decided on a significant change to its strategic roadmap, which set the company’s focus on becoming EBITDA profitable much sooner than previously planned. It is now the Company’s goal to reach profitability by the end of 2020 while becoming cash flow positive by Q3 2020. According to the Board of Directors, these targets indicate a clear trendline in the Company’s business towards stable profitability.

This refocus has already seen important changes to management decision-making and operations, from supply to the Company’s global marketing strategy. In light of these changes, Nustay has seen a quickened pace towards the goal of profitability, both through a significant increase in revenue and a positive return on its marketing investment:

Since February 10th 2020 Nustay has had a positive return on its daily marketing investment, peaking at 75% positive return on a single day when comparing marketing costs vs commission earned on bookings.

As a result of this, management considers that the Company is now trending towards the point of breaking even on these daily measures. Once the marketing activities have stabilized further, Nustay expects to be able to scale its investment in marketing to levels which have so far been out of reach for the Company, which in theory should result in a substantial increase in both handled revenue and net revenue assuming certain assumptions are met.

Updates of the business and the way forward:

Nustay has made diversification of suppliers and payment methods one of its main priorities. In terms of diversification, Nustay has moved away from being reliant on a small number of big hotel suppliers to drive the majority of revenue in its marketing, and instead teamed up with a larger number of market players. Furthermore, as a result of demand from the market, Nustay has added on a wide selection of country-specific online payment services. These include (but are not limited to) Multibanco in Portugal, Giropay in Germany, WeChat Pay in Asia and also PayPal for the global market.

Between December 2019 and February 2020 Nustay rolled out its brand new international website. The new website consists of a data-driven and user-focused interface, as well as several new profit-making features, including flight-tickets, car rental, and airport transfer services. These additional services are offered through premium partnerships and are expected to add to the Company’s top-line revenue with limited risk. Additionally, the launch opens several new and large geographical markets for the Company, such as Japan, Brazil, Mexico, Colombia, and Hong Kong. Meaning that Nustay is now present in 26 markets with a local website.

The launch of the new website will be followed by mobile apps on iOS and Android - expected early 2020. Approximately 75% of all bookings on Nustay are today carried out through mobile devices on their respective internet browsers. This is in sharp contrast to the beginning of 2019 when most bookings were done on a desktop. With the new mobile apps, the Company will be able to extend its marketing strategy into in-app marketing such as push notifications and easier retain customers using their mobile devices to book.

Since the launch of the new website, Nustay has seen noticeable improvements on important KPIs such as site bounce rate, load times and conversion rates. The Company expects further positive uplift in KPIs as a result of the release of the mobile app, the launch of a loyalty program as well as the introduction of additional hotels and holiday homes on its platform. In line with these results, the Board of Directors’ outlook assessed that Nustay carries the capacity for a significant increase in revenue starting 2020.

It is in order to ensure Nustay consolidates the above successes and continues on the current trendline towards long-term stability and profitability, that the Board of Directors have decided to conduct this initial fully pre-subscribed and underwriting committed rights issue of shares and warrants of approximately DKK 27.3 million (before issue costs and including conversion of bridge loans to Units). Specifically, the rights issue will ensure further growth in revenue and better growth margins for the Company through additional and continuous marketing efforts. It will also secure the financing for platform, organizational, and supply chain development in accordance with the strategic objectives. Finally, the proceeds from the rights issue will be used towards debt repayment.

Company targets going forward:

2020

Q1
  • TripAdvisor global launch
  • NustayPRO launch (dedicated B2B distribution business unit)
Q2
  • Monthly handled revenue above DKK 40 million
 
  • Launch of an app for iOS, Android
  • Launch of the loyalty program
  • Kayak global launch
  • Trivago global launch
  • Positive marketing contribution
   
Q3
  • Cash-flow positive
Q4
  • NET profitable (EBITDA profitable)
2021
Q2
  • Monthly handled revenue above DKK 100 million
2021 and forward
During the first years after the listing at Spotlight Stock Market, the Company will primarily focus on its growth and furthering profitability. After this point in time, the focus will gradually shift towards building Nustay’s long-term market position within the OTA market.

Comment from Nustay CEO Mathias Lundoe Nielsen:

“I am pleased that the time has come for us to initiate this fully pre-subscribed and underwriting committed rights issue, which we believe will give us the necessary resources to bring Nustay to the next level. As the last few weeks in particular have shown, we are in a clear positive trend. Whether we look at our new partnership agreements, our fresh and highly functional new platform with its new profit-making product offering, the new geographical markets we are now operating in, our increasing revenue, or, most importantly, our positive marketing contribution across the majority of days over the last month, we can see Nustay situated in a very exciting position. We are now carrying out a rights issue of shares and warrants of totally DKK 50.1 million and are of course grateful that the company's largest owners show continued confidence in our plan going forward. Through the funds received we aim to reach profitability by the end of 2020 while becoming cash flow positive already in Q3 2020.”

The fully pre-subscribed and underwriting committed rights issue of Units:

The Board of Directors has decided to implement a rights issue of Units. The rights issue of Units shall amount to approximately DKK 27.3 million. In addition, through the rights issue of Units, warrants will be issued, which may add a total of approximately DKK 22.8 million. The total issue from the rights issue and the warrants thus amount to approximately DKK 50.1 million (before total issue costs of approximately DKK 5.1 million and conversion of debt of in total approximately DKK 5.8 million). The public will also be given the possibility to subscribe in the rights issue.

Nustay has received pre-subscription commitments of approximately DKK 13.3 million from its major shareholders, board members as well as external investors (of which approximately DKK 9.3 million is from its major shareholders and board members). The company has also received underwriting commitments of approximately DKK 14 million from external investors. The pre-subscription commitments and underwriting commitments thus amount to approximately DKK 27.3 million, which corresponds to a total of 100 percent of the rights issue of Units.

The rights issue is to be carried out with pre-emptive right for existing shareholders, the public is also given the opportunity to subscribe for shares in the rights issue. The overall objective of the capitalization is to finance further growth, rebuild the cash-buffer, and repay the Company’s outstanding debt. Short-term bridge loans provided by pre-subscribers will be pre-paid to the Company. These loans amounting to a total of DKK 4.8 million will be converted to shares and warrants in the issue. DKK 1 million of the bridge financing acquired in 2019 will also be converted to shares and warrants in the issue. Bridge financing amounting to DKK 5.8 million will thereby be converted to shares and warrants and are therefore not included in the specification of capital use from net proceeds. Additionally, a total of DKK 14 million of the net proceeds from the total issue (of which DKK 7.6 million in connection to the initial issue of Units and DKK 6.4 million in connection to the exercise of warrants) will be used to repay outstanding short-term debt acquired as bridge financing in 2019. Debt amounting to DKK 19.8 million will thereby be repaid or converted into share capital in connection to the rights issue.

Summary of the offering:

Subscription period: March 10th, 2020 – March 24th, 2020.
Subscription price: DKK 4.5 per Unit (corresponding to DKK 0.90 per share). The warrants are issued free of payment.
Issue volume: The offer comprises a maximum of 30,367,775 shares and a maximum of 18,220,665 warrants, corresponding to a capital increase of approximately DKK 27.3 million and DKK 22.8 million, respectively, before issuance costs and including conversion of bridge loans to Units. If the issue is fully subscribed and all associated warrants are exercised, the total offer totals approximately DKK 50.1 million before issuance costs and including conversion of bridge loans to Units.
Record date: The record date for obtaining pre-emptive subscription rights is March 9th, 2020 at 17:59 CET. The last day for trading in the share including pre-emptive right to receive pre-emptive subscription rights is March 5th, 2020. The first day of trading in the share excluding pre-emptive right to receive pre-emptive subscription rights is March 6th, 2020.
Pre-emptive right: Those who are registered in VP Securities A/S as shareholders in Nustay on the record date March 9th, 2020 at 17:59 have pre-emptive right to subscribe for shares and warrants in the rights issue. For each existing share, one (1) pre-emptive subscription right is obtained. Three (3) pre-emptive subscription rights entitle to subscription of five (5) new shares and three (3) warrants. If a holder of three (3) pre-emptive subscription rights have exercised such right and subscribed for new shares and warrants during the subscription period, the investor’s subscription will be settled by way of delivery of one (1) Unit to the investor’s account with VP Securities A/S under the temporary ISIN DK0061273711. One Unit entitles the holder to five (5) shares and three (3) warrants. The pre-emptive subscription rights have the ISIN code DK0061275096. New shares and warrants which have not been subscribed for by the existing shareholders before the expiry of the subscription period (the "Remaining Shares") may, without compensation to the holders of unexercised pre-emptive subscription rights, be subscribed for by existing or new shareholders who have made binding undertakings to subscribe for Remaining Shares according to the subscription form available on Sedermera Fondkommission’s web page (www.sedermera.se) and the web page of Nustay (www.nustay.com), before the expiry of the subscription period. In case of oversubscription of Remaining Shares based on binding undertakings, such Remaining Shares will be allocated according to an allocation principal determined by the board of directors of the Company, based on the received binding undertakings; provided, however, that the Remaining Shares will be allocated irrespective of whether such undertakings were made by existing or new shareholders.
The number of shares before the rights issue: 18,220,665 shares.
Pre-subscription commitments and underwriting commitments: The Company has received pre-subscription commitments totaling approximately DKK 13.3 million and Underwriting commitments totaling approximately DKK 14 million, corresponding to a total of 100 percent of the rights issue volume. Approximately 49 percent of the rights issue is covered by pre-subscription commitments and approximately 51 percent of the rights issue is covered by underwriting commitments. This means that approximately 51 percent of the issue is available for subscription by shareholders and other investors.
Trading in pre-emptive subscription rights: Trading in pre-emptive subscription rights will take place on Spotlight Stock Market from March 6th, 2020 and continue until March 20th, 2020.
Allocation and trading in Units: Allocation and trading in Units will take place on Spotlight Stock Market from March 26th, 2020 and continue until March 30th, 2020 after which each paid Unit will be converted automatically into five (5) new shares and three (3) warrants which will be admitted for trading on Spotlight Stock Market.
Settlement day for final trades in Units: Settlement day at VP Securities for final trades in Units is expected to April 1st, 2020.
Settlement day for conversion to ordinary shares and warrants: The new shares and warrants are expected to be registered with the Danish Business Authority on April 2nd, 2020. Settlement day at VP Securities for conversion to ordinary shares and allocation of warrants is expected to take place during April 1st, 2020 and April 2nd, 2020.
Trading in new shares and warrants: Trading in the new shares and warrants is expected to commence on April 3rd, 2020.
Exercise period (warrants): August 27th, 2020 – September 10th, 2020.
Exercise price (warrants): The holding of one (1) warrant entitles to the subscription of one (1) new share in Nustay at an exercise price of DKK 1.25 per share.
Dilution: Shareholders who choose not to exercise their pre-emptive right to subscribe for shares and warrants will receive a maximum dilution of approximately 73 percent as a result of the rights issue of shares and warrants (calculated as the number of new shares as a result of the rights issue (including the exercise period of warrants) divided by the total number of shares in the Company after the event that the rights issue is fully subscribed and all issued warrants are exercised).

Estimated issue costs:

Estimated issue costs attributable to the rights issue of shares and warrants (including costs attributable to guarantee compensation) amount to approximately DKK 3.6 million, of which approximately DKK 1.4 million refers to guarantee compensation. Furthermore, estimated costs attributable to the exercise of warrants amount to approximately DKK 1.5 million. The cost attributable to the issue amounts to approximately 10 percent of the total issue volume.

Publication of prospectus:

In connection with the issue described in this press release, Nustay is publishing a prospectus which is available both at Nustay's and Spotlight Stock Markets' respective websites (www.nustay.com and www.spotlightstockmarket.com). For full terms and conditions regarding Nustay's issue, please refer to the above-mentioned prospectus published in connection with the transaction.

Updated loan agreements:

Since the autumn of 2019 (see separate press releases previously published on September 6th and November 21st, 2019), Nustay has had a combined debt to creditors of DKK 15 million. This will now be partly repaid - the outstanding part has been extended and re-negotiated. In the planned rights issue, approximately DKK 7,6 million will be repaid. This leaves an outstanding debt of approximately DKK 6.4 million, which has been extended and shall be re-paid to the creditors no later than September 30th, 2020. In connection with the extension, the interest has been re-negotiated to 1.5% per month. The remaining DKK 1 million will be converted to shares and warrants in the rights issue. Furthermore, in case the company does not re-pay the loan by September 30th, 2020, the creditors can request that the loan is converted into shares (subject to approval by an Extraordinary General Meeting). In case of conversion, the conversion price shall be established based on a 10-day volume weighted average price of the trading price of the creditors’ shares on Spotlight Stock Market, based on 10 days prior to the date of conversion, with a 10 % percent discount. However, this price may not be below 0.90 DKK per share. It shall also be noted that one of the creditors, Formue Nord Markedsneutral A/S, has transferred its share of the loan to Formue Nord Fokus A/S.

Technical information regarding the financial instruments:

Shares:

ISIN code: DK0061132305

FISN: Nustay AS/-

CFI: ESVUFN

Pre-emptive subscription rights:

ISIN code: DK0061275096

FISN: Nustay AS/T-ret

CFI: RSSXXB

Interim share nr. 1/”Units”:

ISIN code: DK0061273711

FISN: Nustay AS/Midl Unit

CFI: ESVUFN

Interim share nr. 2:

ISIN code: DK0061273984

FISN: Nustay AS/Midl

CFI: ESVUFN

Warrants:

ISIN code: DK0061274016

FISN: Nustay AS/Warrant

CFI: RWSTCB

Financial advisor and issuing agent:

Sedermera Fondkommission acts as financial advisor and issuing agent to Nustay in connection with the rights issue of Units. VP Securities also acts as issuing agent to Nustay in connection to the rights issue of Units.

For more information on the rights issue of Units, please contact:

Sedermera Fondkommission

Phone: +46 40 – 615 14 10

Email: info@sedermera.se

www.sedermera.se

For further information about Nustay, please contact:

Investor Relations, Nustay A/S

Email: investor@nustay.com

Website: www.nustay.com

This information is information that Nustay A/S is obliged to publish following the EU Market Abuse Regulation. The information was provided by the contact person above for publication on March 4th, 2020.

About Nustay:

Nustay is a Danish online hotel booking company established in 2014. The company has developed an innovative booking platform offering the lowest possible hotel prices while also enhancing customer’s booking experience. Nustay has set out an ambitious vision to become the global leader within the online hotel booking industry and is confident its large hotel room inventory, novel pricing strategy, and transparent booking process, will achieve that goal.

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