Raute has agreed on convertible perpetual junior loans in the aggregate amount of up to four (4) million euro

RAUTE CORPORATION Stock Exchange Release 22 May 2023 at 14.00 EEST

Raute Corporation (“Raute” or the ”Company”) announced on 9 March 2023 that the Company is planning a directed share issue, a rights issue and a possible junior loan to support its targeted growth and strengthening of capital structure. The Company has today on 22 May 2023 agreed on an up to EUR two (2) million perpetual junior loan with Lähitapiola Yritysrahoitus I Ky (“LocalTapiola”) and an up to EUR two (2) million perpetual junior loan with Veritas Pension Insurance Company Ltd (“Veritas”) (each alone “Junior Loan” and together “Junior Loans”). The Junior Loans have substantially same terms and condtions. The Junior Loans ar available to be drawn down until 27 June 2023 provided that the company has by then been able to raise equity in the aggregate gross amount of EUR 10 million (into which the gross amout of equity of approximately EUR 6.440 million already raised by the Company by a directed share issue in the beginning of April is included). The Company has a right, but not an obligation, to repay the Junior Loans on the date falling 36 months from the date of the drawdown of the Junior Loans or any interest payment date thereafer. Prior to this date the Company may repay the Junior Loans in only certain specific events specified in the terms and conditions of the Junior Loans; for example in an event where a person or group of persons acting in concert acquires or establishes a control over shares representing more than 50 per cent. of the capital and voting rights in the Company. LähiTapiola and Veritas have right to convert the outstanding principal amount of the Junior Loan into new shares of the Company in full, but not in part in accordance with the terms and conditions of the option rights related to the Junior Loan (the “Conversion Right”).

In order to execute the Conversion Right related to the Junior Loans, the Company's Board of Directors has today on 22 May 2023 decided, pursuant to the authorization of the Company's Annual General Meeting of 30 March 2023, to issue up to 296 296 option rights, split equally between LocalTapiola and Veritas. The decision to issue option rights is conditional on the drawdown of the Junior Loans by the Company. Each option right entitles to subscribe one new share by offsetting the principal of the Junior Loan against the subscription price. The subscription price of one share is EUR 13.50, which corresponds to the volume-weighted average price (VWAP) of the Company's share on the stock exchange list maintained by Nasdaq Helsinki Ltd during the 30 days preceding the signing date of the loan agreements plus premium of 30 per cent. The subscription price may be adjusted in certain situations in accordance with the terms and conditions of the option rights. The Conversion Right under each of the Junior Loans is available from the drawdown date until four (4) years has passed from the date of signing of the loan agreement. If the Company draws down the Junior Loans and LähiTapiola and Veritas will use the Conversion Right, this will have a diluting effect to existing shareholdings. The size of the diluting effect depends on the amount drawn under the Junior Loans and any adjustment made to the subscription price in accordance with the terms of the option rights.

Each Junior Loan is a capital loan within the meaning of Chapter 12 of the Companies Act. The Junior Loans are intended to be applied for general corporate purposes of Raute group. In accordance with the provisions of the Companies Act, the principal and interest of the Junior Loans are subordinate to all other debts in the liquidation and bankruptcy of the Company. The principal may be otherwise repaid and interest paid only in so far as the sum total of the unrestricted equity and all of the capital loans of the company at the time of payment exceed the loss on the balance sheet to be adopted for the latest financial period or the loss on the balance sheet from more recent financial statements. Junior Loans are treated as equity in the group's IFRS financial statements. Junior Loans are perpetual, but the Company may redeem the Junior Loans in accordance with terms and conditions of the Junior Loans.

The first interest period of Junior Loans begins on the date of drawdrown of the loan (the “Drawdown Date”) and ends on the date prior to the date on which three (3) years has passed from the Drawdown Date. The second interest period shall begin from the date on which three (3) years has passed from the Drawdown Date to the date preceding the date on which the principal amount of the loan and the interest accrued on the loan have been repaid in full. The annual floating rate during the first interest period is 7.50 per cent added with six (6) months EURIBOR. The annual floating rate during the second interest period is 12.50 per cent added with six (6) months EURIBOR.

Further information:

RAUTE CORPORATION

Mika Saariaho

President and CEO

FURTHER INFORMATION:
Mr. Mika Saariaho, President and CEO, tel. +358 40 1549393

DISTRIBUTION:

Nasdaq Helsinki Ltd, main media, www.raute.com

RAUTE IN BRIEF – Making Wood Matter

Raute is the partner to future-proof the wood industry. Our technologies cover different production processes with supporting digital and analytics solutions for engineered wood products.  Additionally, we offer full-scale service concept ranging from spare parts to regular maintenance and modernizations. Our innovative hardware and software solutions are designed to support our customers’ efficient consumption of natural resources. In mill-scale projects, Raute is a global market leader both in the plywood and LVL industries. Raute’s head office and main production is located in Lahti, Finland. The company’s other production plants are located in Kajaani, Finland, the Vancouver area of Canada, Changzhou, China, and in Pullman, WA, USA. Raute’s net sales in 2022 were EUR 158.3 million. The Group’s headcount at the end of 2022 was 778. More information about the company can be found at www.raute.com.