Raute's Board of Directors has made a decision on a rights offering and filed a listing application to list shares and subscription rights

RAUTE CORPORATION Stock Exchange Release 22 May 2023 at 14.05 EEST

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, HONG KONG, SOUTH AFRICA, SINGAPORE, JAPAN, NEW ZEALAND OR ANY OTHER JURISDICTION IN WHICH THE RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL.

Raute Corporation (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 targeted growth and strengthening of capital structure. Today on 22 May 2023, with the authorisation granted by the Annual General Meeting on 30 March 2023, the Board of Directors of the Company has decided on an offering in which the Company issues up to 1 020 446 new shares in the Company (the “Offer Shares”) in accordance with the terms and conditions of the rights offering attached hereto primarily to the Company’s existing shareholders in proportion to the number of shares they hold in the Company (the “Existing Shares”) and secondarily to the members of the mangement team of the Company and to the shareholders and other investors of the Company that have given prior subscription commitments (the “Offering”).

The Offering in brief

• The intention of the Offering is to support the promotion of growth objectives under the Company’s new strategy announced on 30 March 2023 and to strengthen the Company’s capital structure.

• With the Offering, the Company aims to raise gross proceeds of approximately EUR 7.5 million by offering a maximum of 1 020 446 Offer Shares for subscription.

• The Offer Shares will primarily be offered for subscription to the existing shareholders of the Company in proportion to their holding of Existing Shares.

• A shareholder who is on the record date of the Offering on 25 May 2023 (the “Record Date”) registered in the Company’s shareholders’ register maintained by Euroclear Finland Oy (“Euroclear Finland”) or, as regards nominee-registered shares, a shareholder on whose behalf the shares have been registered in the Company’s shareholders’ register on the Record Date, will automatically receive one (1) freely transferable subscription right as a book-entry for each Existing Share in the Company held on the Record Date (the “Subscription Right”).

• The Subscription Rights will be registered on the shareholders’ book-entry accounts in the book-entry system maintained by Euroclear Finland on 26 May 2023.

• The subscription price is EUR 7.35 per Offer Share (the “Subscription Price”).

• Holders of Subscription Rights have the right to subscribe for Offer Shares using Subscription Rights so that five (5) Subscription Rights entitle the holder to subscribe for one (1) Offer Share at the Subscription Price (the “Primary Subscription”). No fractional Offer Shares will be issued, and no Subscription Right may be used only in part.

• The subscription period for the Offering will commence on 30 May 2023 at 9:30 a.m. Finnish time and expire on 13 June 2023 at 4:30 p.m. Finnish time (the “Subscription Period”), unless the Subscription Period is extended. Any unexercised Subscription Rights will expire with no value at the end of the Subscription Period, and they will be removed from the book-entry accounts of the holders without separate notice or compensation.

• The Subscription Rights will be subject to trading on the official list of Nasdaq Helsinki Ltd (the “Helsinki Stock Exchange”) from 10:00 a.m. Finnish time on 30 May 2023 to 6:30 p.m. Finnish time on 7 June 2023, provided that the Subscription Period is not extended and that the Helsinki Stock Exchange approves the Company’s listing application. The ISIN code of the Subscription Rights is FI4000552906 and the trading symbol is RAUTEU0123.

• The Offer Shares subscribed based on the Subscription Rights will be registered on the shareholders’ book-entry accounts as interim shares representing the Offer Shares (“Interim Shares”) after the subscription has been made and paid. The Interim Shares are freely transferable, and they will be subject to trading on the official list of the Helsinki Stock Exchange as a share class of their own from the first trading day after the Subscription Period on or about 14 June 2023, provided that the Subscription Period is not extended and that the Helsinki Stock Exchange approves the Company’s listing application concerning the Interim Shares. The ISIN code of the Interim Shares is FI4000552914 and the trading symbol is RAUTEN0223.

• The lead manager of the Offering is Evli Plc (the “Lead Manager”).

Listing of unlisted Existing Shares

As announced earlier, the Annual General Meeting on 30 March 2023 decided on the combination of the Company’s share classes without raising the share capital to the effect that after the combination all shares are of the same class and carry equal rights in the company. The combination of the share classes has thereby entered into force on 3 April 2023 when the previous ordinary shares were converted to shares in the only share class of the Company post-combination, equivalent to previous class A shares (the “Conversion Shares”), at a conversion rate of 1:1, i.e., one (1) ordinary share was converted to one (1) Conversion Share. One ordinary share has thus been granted one Conversion Share. There are a total of 991 161 Conversion Shares and they have not been previously subject to trading on the official list of Helsinki Stock Exchange.

The Annual General Meeting on 30 March 2023 decided on a directed share issue, in accordance with advance subscription commitments, to certain shareholders, institutional investors and private persons (“Directed Offering”) whose commitments covered all of the 839 039 new shares issued in the Directed Offering (“Directed Offering Shares”). The Directed Offering Shares were registered to the Trade Register on 5 April 2023. 643 725 Directed Offering Shares (representing less than 20 per cent of the securities already admitted to trading ) have been admitted to trading on the Helsinki Stock Exchange on 6 April 2023 without a prospectus. The remaining 195 314 Directed Offering Shares (“Shares Subject to Later Listing”) have not been previously admitted to trading on the Helsinki Stock Exchange.

The Company has drawn up a prospectus, described further below, for, among others, listing the Conversion Shares and Shares Subject to Later Listing to trading on the official list of the Helsinki Stock Exchange and has submitted today 22 May 2023 an application for listing (described further below) to the Helsinki Stock Exchange to admit the Conversion Shares and Shares Subject to Later Listing in to trading on the official list of the Helsinki Stock Exchange so that the first day of trading would be on or about 24 May 2023. The Conversion Shares have a temporary ISIN code FI4000549928 and the Shares Subject to Later Listing has a temporary ISIN code FI4000549936, until they will be admitted to trading on the Helsinki Stock Exchange. After the Conversion Shares and the Shares Subject to Later Listing have been admitted to trading on the Helsinki Stock Exchange, they will have the same ISIN code FI0009004741 and the trading symbol RAUTE as the shares of the Company that are already admitted to trading on the Helsinki Stock Exchange.

The trading of the Conversion Shares and the Shares Subject to Later Listing will start on or about 24 May 2023.

The Conversion Shares and the Shares Subject to Later Listing will produce the right for Subscription Rights as well as the Existing Shares.

The Prospectus

The Company has drawn up a prospectus for the Offering and the listing of Offer Shares, Conversion Shares and  Shares Subject to Later Listing (“Prospectus”) and submitted the Prospectus to the Finnish Financial Supervisory Authority for approval. The Company expects the Prospectus to be approved by the Finnish Financial Supervisory Authority on or about 23 May 2023. Once approved by the Finnish Financial Supervisory Authority, the Prospectus will be available on the Company’s website at www.raute.com/shareissue on or about 23 May 2023. In addition, the Prospectus will be available on the website of Evli Plc (the “Lead Manager” or “Evli”), the Lead Manager of the Offering, at www.evli.com/en/raute on or about 23 May 2023.

Listing application

The Company has filed today, on 22 May 2023, a listing application with the Helsinki Stock Exchange for the admission to trading of the Conversion Shares, Shares Subject to Later Listing, Subscription Rights and Interim Shares on the official list of Helsinki Stock Exchange so that trading with the Converison Shares and Shares Subject to Later Listing to trading would start on 24 May 2023, trading with Subscription Rights would be possible from 30 May 2023 at 10:00 a.m. to 7 June 2023 at 18:30 pm. (unless the Subscription Period is extended) and trading with the Interim Shares would be possible from on or about 14 June 2023 (unless the Subscription Period is extended).

The Company expects to later file a separate listing application with the Helsinki Stock Exchange for the admission to trading of the Offer Shares to the official list, after the Board of the Company has approved the subscriptions. The trading in Offer Shares is expected to begin on or about 21 June 2023 (unless the Subscription Period is extended).

The Subscription Commitments received by the Company

The Company has received prior commitments to subscribe for Offer Shares in the Offering for a total of approximately EUR 3.7 million on certain customary conditions (each separately “Subcription Commitment” and all togerther “Subscription Commitments”). Göran Sundholm, who is the largest shareholder of the Company, and eQ Asset Management Ltd as a portfolio manager on behalf of funds managed by it have each on certain customary conditions undertaken in advance to subscribe for Offer Shares in proportion to their shareholdings. The proportion of Göran Sundholm is more than ten (10) and the proportion of the funds managed by eQ Asset Management Ltd is more than five (5) per cent of all Offer Shares. In addition,  Handelsbanken Fonder AB on behalf of Handelsbanken Finland Småbolag, Mikko Laakkonen, Mininvest Oy, Pär-Gustaf Relander, Stephen Industries Inc Oy, Osku Siivonen, UB Fund Management Company Ltd on behalf of funds managed by it, Varma Mutual Pension Insurance Company and Verhold Oy have given Subscription Commitments subject to certain customary conditions and  certain members of the Board of Directors and of the Executive Board, as well as certain Company’s existing shareholders who gave their acceptance to the combination of the Company’s share classes before the Annual General Meeting held on 30 March 2023. Subscription Commitments amount in total to approximately 49 per cent of the Offer Shares if the Offering is subscripted fully.

More detailed information on the Offering

As a result of the Offering, the total number of shares in the Company may increase from 5 102 233 Existing Shares to a maximum of 6 122 679 shares. The Offer Shares represent approximately 17 per cent of all of the shares and votes in the Company after the Offering, assuming that the Offering is completed in full.

The Subscription Price includes an imputed discount customary in subscription rights offerings compared to the theoretical ex-rights price based on the closing price of the Company's share on the trading day on the Helsinki Stock Exchange immediately preceding the decision on the Offering. The Subscription Prices will be credited in full to the Company’s reserve for invested unrestricted equity.

In the event not all the Offer Shares are subscribed for in the Primary Subscription, both the company’s shareholders and other persons have a right to subscribe for the unsubscribed Offer Shares without Subscription Rights at the Subscription Price (the “Secondary Subscription”).

The Offer Shares will carry the right to receive dividends and other distributions of funds by the Company, if any, and to other shareholder rights in the Company as of the registration of the Offer Shares with the Trade Register and in the shareholders’ register of the Company maintained by Euroclear Finland on or about 20 June 2023. Each Offer Share entitles to one (1) vote at the Company’s General Meeting.

The Board of Directors of the Company will approve any subscriptions made with Subscription Rights provided that the subscriptions have been made in accordance with the terms and conditions of the Offering and applicable laws and regulations. In the event not all the Offer Shares have been subscribed for with Subscription Rights, the Board of Directors of the Company will approve any subscriptions made without Subscription Rights provided that they have been made in accordance with the terms and conditions of the Offering and applicable laws and regulations by applying the allocation principles set out below. The approval of the subscriptions made without Subscription Rights in the Secondary Subscription and allocation of the Offer Shares to the subscribers is determined based on the Lead Manager’s proposal as follows:

1. First to the members of the Company’s Executive Board who have subscribed for Offer Shares in the Secondary Subscription in accordance with their Subscription Commitment to the maximum amount covered by said Subscription Commitment. If the Offering will be oversubscribed in this manner, the allocation to the subscribers will be determined by book-entry account in proportion to the number of Offer Shares subscribed for by the subscriber or, where this is not possible, by drawing lots.
2. Second to other subscribers who have having given a Subscription Commitment and subscribed for Offer Shares in the Secondary Subscription in accordance with their Subscription Commitment to the maximum amount covered by said Subscription Commitment. If the Offering will be oversubscribed in this manner, the allocation to the subscribers will be determined by book-entry account in the Secondary Subscription in proportion to the number of Offer Shares subscribed for by the subscribers or, where this is not possible, by drawing lots.
3. Third to those subscribers who have subscribed for Offer Shares in the Secondary Subscription. If the Offering will be oversubscribed in this manner, the allocation to the subscribers will be determined by book-entry account in proportion to the number of Offer Shares subscribed for by the subscriber, however, so that the subscriptions based on the Subscription Commitments mentioned in i. and ii. are not taken into account when calculating this proportion or, where this is not possible, by drawing lots.

The Board of Directors of the Company will decide on the approval of the subscriptions, and the Company will publish the final results of the Offering in a stock exchange release on or about 16 June 2023 unless the Subscription Period is extended.

The Offer Shares subscribed in the Offering will be registered to the Trade Register on or about 20 June 2023 and the trading in the Offer Shares as shares of the same class as the Existing Shares is expected to commence on the Helsinki Stock Exchange on or about 21 June 2023, unless the Subscription Period is extended.

Certain important dates relating to the Offering

• 23 May 2023 Last day of trading in shares bearing Subscription Rights

• 24 May 2023 Trading in Conversion Shares comments on the Helsinki Stock Exchange (approximately)

• 24 May 2023 Trading in Shares Subject to Later Listing commences on the Helsinki Stock Exchange (approximately)

• 24 May 2023 Ex-Rights Date

• 25 May 2023 Record Date of the Offering

• 26 May 2023 Subscription Rights will be registered on the shareholders’ book-entry accounts

• 30 May 2023 The Subscription Period for the Offer Shares commences

• 30 May 2023 Trading in Subscription Rights commences on the Helsinki Stock Exchange

• 7 June 2023 Trading in Subscription Rights ends on the Helsinki Stock Exchange

• 13 June 2023 The Subscription Period for the Offer Shares ends, i.e. the last date to subscribe for the Offer Shares based on the Subscription Rights – account operators, custodians and nominees may impose deadlines for subscription that are different from the Subscription Period

• 13 June 2023 Any unexercised Subscription Rights will expire

• 14 June 2023 Trading of Interim Shares representing the Offer Shares commences on the Helsinki Stock Exchange (approximately)

• 20 June 2023 The Offer Shares are registered with the Trade Register and the Interim Shares are combined with the Existing Shares (approximately)

• 21 June 2023 Trading in the Offer Shares as shares of the same class as the Existing Shares commences on the Helsinki Stock Exchange (approximately)

Advisers

The lead manager of the Offering is Evli Plc. The legal adviser to the Company is Castrén & Snellman Attorneys Ltd and the communications adviser to the Company is Hill+Knowlton Strategies.

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, http://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 production 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.  

Appendices:

Terms and Conditions of the Rights Issue

IMPORTANT INFORMATION

This release is not an offer for sale of securities in the United States. 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. The Company 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.

The distribution of this release may be restricted by law, and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restrictions. The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States, Canada, Australia, Hong Kong, South Africa, Singapore, Japan or New Zealand. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This release is not directed to, and is not intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction.

In any EEA Member State, other than Finland, this release is only addressed to and is only directed at qualified investors in that Member State within the meaning of Regulation (EU) 2017/1129 (the “Prospectus Regulation”).

This release is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth companies and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “Relevant Persons”). Any securities mentioned herein are only available to, and any invitation, offer or agreement to subscribe for, purchase or otherwise acquire such securities will be engaged in only with, Relevant Persons. Any person who is not a Relevant Person should not act or rely on this release or any of its contents.

This release does not constitute a prospectus as defined in the Prospectus Regulation and, as such, does not constitute or form part of, and should not be construed as, an offer to sell, or a solicitation or invitation of any offer to buy, acquire or subscribe for, any securities or an inducement to enter into investment activity.

No part of this release, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. The information contained in this release has not been independently verified. No representation, warranty or undertaking, expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. The Company or any of its respective affiliates, advisors or representatives or any other person, shall have no liability whatsoever (in negligence or otherwise) for any loss however arising from any use of this release or its contents or otherwise arising in connection with this release. Each person must rely on their own examination and analysis of the Company, its subsidiaries, its securities and the transactions, including the merits and risks involved.

The Lead Manager is acting exclusively for the Company and no one else in connection with the potential Offering. It will not regard any other person as its respective client in relation to the Offering. The Lead Manager will not be responsible to anyone other than the Company for providing the protections afforded to its respective clients nor for giving advice in relation to the Offering or any transactions or arrangements referred to herein.

This release includes “forward-looking statements”. Such statements are not necessarily based on historical facts, but they are statements concerning future expectations. When used in this release, the words “aims,” “anticipates,” “assumes,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “should,” “will,” “would” and similar expressions as they relate to the Company and the Offering identify certain of these forward-looking statements. Other forward-looking statements can be identified from the context in which such statements have been made. These forward-looking statements are based on present plans, estimates, projections and expectations and are not guarantees of future performance. They are based on certain expectations, which, even though they seem to be reasonable at present, may turn out to be incorrect. Such forward-looking statements are based on assumptions and are subject to various risks and uncertainties. Readers should not rely on these forward-looking statements. Numerous factors may cause the actual results of operations or financial position of the Company to differ materially from those expressed or implied in the forward-looking statements. The Company or any of its affiliates, advisors or representatives or any other person undertakes no obligation to review or confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise after the date of this release.