Scandinavian Enviro Systems AB (publ) successfully completes a directed share issue of 150 million shares and raises proceeds of SEK 300 million

The Board of Directors of Scandinavian Enviro Systems AB (publ) ("Enviro" or the "Company") has resolved on a directed share issue of 150,000,000 shares at a subscription price of SEK 2.00 per share (the "Directed Share Issue") based on the accelerated bookbuilding procedure completed by Pareto Securities AB (“Pareto Securities” or the “Manager”). The subscription price for the shares in the Directed Share Issue has been determined through the accelerated bookbuilding procedure. The Directed Share Issue was heavily oversubscribed. Through the Directed Share Issue, Enviro will receive proceeds amounting to SEK 300 million before deduction of costs related to the Directed Share Issue. A number of new Swedish and international institutional investors, including Cicero Fonder, Coeli Circulus, Handelsbanken Fonder, Skandia and Öhman Fonder, participated in the Directed Share Issue.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES, AUSTRALIA, CANADA, NEW ZEALAND, HONG KONG, JAPAN, SINGAPORE, SOUTH AFRICA, SOUTH KOREA OR ANY OTHER JURISDICTION WHERE SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL OR WOULD REQUIRE REGISTRATION OR ANY OTHER MEASURES. PLEASE REFER TO IMPORTANT INFORMATION AT THE END OF THE PRESS RELEASE.

"I am very pleased with today’s transaction, another milestone achieved, and a token of Enviro’s ability to attract several high-quality institutional investors supporting our investment case. We now have the financial flexibility allowing us to accelerate the pan-European expansion of tire recycling plants, together with our joint venture partners, while focusing on our core competencies, and continue our journey towards making the tire industry circular", says Alf Blomqvist, Chairman.

Summary of the Directed Share Issue

• The subscription price in the Directed Share Issue amounts to SEK 2.00 per share and has been determined through an accelerated bookbuilding procedure carried out by Pareto Securities.

• Through the Directed Share Issue, Enviro will receive proceeds amounting to SEK 300 million, before deduction of costs related to the Directed Share Issue.
   
• The Directed Share Issue was subscribed for by a number of new Swedish and international institutional investors, including Cicero Fonder, Coeli Circulus, Handelsbanken Fonder, Skandia and Öhman Fonder.

• Through the Directed Share Issue, the number of shares in the Company will increase by 150,000,000 from 656,615,589 to 806,615,589 and the share capital will increase by SEK 6,000,000 from SEK 26,264,623.56 to SEK 32,264,623.56.

The Directed Share Issue

The Board of Directors of Enviro has, based on the authorization granted at the annual general meeting held on 19 May 2022, resolved on the Directed Share Issue which was directed to Swedish and international institutional, and other qualified, investors. The Directed Share Issue comprises 150,000,000 new shares at a subscription price of SEK 2.00 per share and the Company will hereby receive SEK 300 million before deduction of costs related to the Directed Share Issue.

The subscription price has been determined through an accelerated bookbuilding procedure and corresponds to a discount of approximately 8.3 percent compared to the closing price of the Company's share on Nasdaq First North Growth Market Stockholm on 4 May 2023. The Board of Directors’ assessment is that the subscription price is based on market terms since it has been determined through Pareto Securities’ bookbuilding procedure.

The background to the Directed Share Issue is the Company’s previously announced joint venture with Antin Infrastructure Partners, supported by Michelin, to create the world’s first large-scale tire recycling group, and the Company’s option to acquire up to 30 percent of the capital and the votes in the JV-company during a certain period and at certain terms. Enviro has the ambition to own 30 percent of shares in the JV-company, providing financing pro rata for any equity needed in the JV-company. The Board of Directors has deemed it crucial that the Company can secure its financing in the short and medium term to enable long-term value creation through its ownership in the JV-company. Thus, Enviro intends to use the net proceeds from the Directed Share Issue to (i) acquire shares in the JV-company and thereby, together with Antin Infrastructure Partners, finance the first plant at Uddevalla (approximately 75 percent of the net proceeds), and (ii) finance the Company’s operations for at least 24 months (approximately 25 percent of the net proceeds).

The Board of Directors has against the background described above considered various financing alternatives and concludes that the alternative which allows the Company to meet its financing needs is a new issue of shares with deviation from the shareholders’ preferential rights. The Board of Directors further concludes that it is beneficial for the Company to increase its institutional shareholder base and that an increased liquidity in the Company’s share is desirable. The Board of Directors’ overall assessment is that the reasons for issuing shares with deviation from the shareholders’ preferential rights outweighs the reasons for the main rule that new issues shall be conducted with preferential rights for the shareholders. A new issue of shares with deviation from the shareholders’ preferential rights is thus in line with the Company’s and all shareholders’ interests.

Through the Directed Share Issue, the number of shares in the Company will increase by 150,000,000 from 656,615,589 to 806,615,589 and the share capital will increase by SEK 6,000,000 from SEK 26,264,623.56 to SEK 32,264,623.56. The Directed Share Issue entails a dilution of approximately 18.6 percent based on the total number of shares in Enviro after the Directed Share Issue.

Undertakings

In connection with the Directed Share Issue, the Company has undertaken, with customary exceptions, not to issue additional shares for a period of six months after the announcement of the outcome in the Directed Share Issue. All of the Company’s board members and senior executives have undertaken, with customary exceptions, not to sell or in other ways dispose their shares or other securities in the Company for a period of 90 calendar days after the announcement of the outcome of the Directed Share Issue.

Advisors

Pareto Securities AB acts as Sole Manager and Bookrunner, Wigge & Partners Advokat KB acts as legal adviser to the Company and Baker McKenzie Advokatbyrå KB is legal adviser to Pareto Securities AB in connection with the Directed Share Issue.

For further information, please contact:
Thomas Sörensson, CEO Enviro, +46 (0)735-10 53 43, thomas.sorensson@envirosystems.se
Alf Blomqvist, Chairman of the Board Enviro, +46 (0)733-14 97 00, alf@blomqvistunlimited.com

Mangold Fondkommission AB is Enviro’s Certified Adviser on Nasdaq First North Growth Market Stockholm.

Scandinavian Enviro Systems AB
Frihamnen 16B, SE-417 70 Gothenburg
info@envirosystems.se
envirosystems.se

Important information

The release, announcement or distribution of this press release may, in certain jurisdictions, be subject to restrictions. The recipients of this press release in jurisdictions where this press release has been published or distributed shall inform themselves of and follow such restrictions. The recipient of this press release is responsible for using this press release, and the information contained herein, in accordance with applicable rules in each jurisdiction. This press release does not constitute an offer to sell or an offer to buy or subscribe for shares issued by the Company in any jurisdiction where such offer or invitation would be unlawful or require additional registration or other measures.

This press release does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein may not be sold in the United States absent registration or an exemption from registration under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There is no intention to register any securities referred to herein in the United States or to make a public offering of the securities in the United States. The information in this press release may not be announced, published, copied, reproduced or distributed, directly or indirectly, in whole or in part, within or into the United States, Australia, Hong Kong, Japan, Canada, New Zeeland, Switzerland, Singapore, South Africa, Russia and Belarus or in any other jurisdiction where such announcement, publication or distribution of the information would not comply with applicable laws and regulations or where such actions are subject to legal restrictions or would require additional registration or other measures than what is required under Swedish law. Actions taken in violation of this instruction may constitute a crime against applicable securities laws and regulations.

This press release is not a prospectus as set forth in Regulation (EU) 2017/1129 (the "Prospectus Regulation") and has not been approved by any regulatory authority in any jurisdiction. The Company has not approved any securities offering to the public in any member state of the EEA and no prospectus has been published or will be published in connection with the Directed Share issue. In each member state of the EEA, this message is only directed towards "qualified investors" in that member state in accordance with the definition in the Prospectus Regulation.

In the United Kingdom, this document and any other materials in relation to the securities described herein is only being distributed to, and is only directed at, and any investment or investment activity to which this document relates is available only to, and will be engaged in only with, "qualified investors" (within the meaning of Article 86(7) of the Financial Services and Markets Act 2000) who are (i) persons having professional experience in matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). In the United Kingdom, any investment or investment activity to which this communication relates is available only to, and will be engaged in only with, relevant persons. Persons who are not relevant persons should not take any action on the basis of this press release and should not act or rely on it.

This announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the shares. Any investment decision in connection with the Directed Share issue must be made on the basis of all publicly available information relating to the Company and the Company's shares. Such information has not been independently verified by the Manager. The Manager acts for the Company in connection with the transaction and no one else and 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 transaction or any other matter referred to herein.

This press release does not constitute a recommendation for any investors' decisions regarding the Directed Share issue. Each investor or potential investor should conduct a self-examination, analysis and evaluation of the business and information described in this press release and any publicly available information. The price and value of the securities can decrease as well as increase. Achieved results do not provide guidance for future results. Neither the contents of the Company's website nor any other website accessible through hyperlinks on the Company's website are incorporated into or form part of this press release.

Failure to follow these instructions may result in a breach of the Securities Act or applicable laws in other jurisdictions.

Forward-looking statements

This press release contains forward-looking statements that reflect the Company's intentions, beliefs, or current expectations about and targets for the Company's future results of operations, financial condition, liquidity, performance, prospects, anticipated growth, strategies and opportunities and the markets in which the Company operates. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "intend", "may", "plan", "estimate", "will", "should", "could", "aim" or "might", or, in each case, their negative, or similar expressions. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurances that they will materialize or prove to be correct. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements as a result of many factors. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The Company does not guarantee that the assumptions underlying the forward-looking statements in this press release are free from errors and readers of this press release should not place undue reliance on the forward-looking statements in this press release. The information, opinions and forward-looking statements that are expressly or implicitly contained herein speak only as of its date and are subject to change without notice. Neither the Company nor anyone else undertake to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this press release, unless this is required under law or Nasdaq First North Growth Market Stockholm’s rulebook for issuers.

Information to distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the shares in Enviro have been subject to a product approval process, which has determined that such shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, Distributors should note that: the price of the shares in Enviro may decline and investors could lose all or part of their investment; the shares in Enviro offer no guaranteed income and no capital protection; and an investment in the shares in Enviro is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Directed Share issue. Thereto, notwithstanding the Target Market Assessment, it shall be noted that the Manager will only provide investors who meet the criteria for professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the shares in Enviro.

Each distributor is responsible for undertaking its own target market assessment in respect of the shares in Enviro and determining appropriate distribution channels.

This disclosure contains information that Scandinavian Enviro Systems is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 05-05-2023 00:55 CET.

N.B. The English text is an in-house translation of the original Swedish text. Should there be any disparities between the Swedish and the English text, the Swedish text shall prevail.

Scandinavian Enviro Systems contributes to enhanced environmental and economic sustainability using a patented technology for the recovery of valuable raw materials from scrapped and end-of-life products, including tires. The production of new tires using carbon black recovered with Enviro’s technology reduces carbon dioxide emissions by up to 93 per cent compared with the use of virgin carbon black. Enviro has its head office in Gothenburg and a plant for the recycling of end-of-life tires in Åsensbruk. The largest owner is the French tire manufacturer Michelin. Enviro was founded in 2001 and is listed on Nasdaq First North Growth Market. www.envirosystems.se

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