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Oslo, 14 June 2023: Elektroimportøren AS ("Elektroimportøren" or the "Company") has agreed amendments of its covenants with its bank, DNB Bank ASA (the “Waiver Agreement”) and updates the market on current trading and outlook in order to facilitate an equity raise of up to NOK 120 million as announced separately.
The Company has in place bank facilities of NOK 515 million with DNB Bank ASA (the "Senior Facilities Agreement"). The only existing covenant pursuant to the Senior Facilities Agreement is NIBD/EBITDA (NGAAP) measured quarterly, which shall not be higher than 3.5x in Q1, 3.5x in Q2, 3.5x in Q3 and 3.0x in Q4.
As communicated at the Q1 2023 reporting, Elektroimportøren’s markets have been challenging driven by low consumer confidence and reduced demand in general. In addition, Elektroimportøren has experienced significantly lower sales of Easee EV chargers due to the sales ban by The National Electrical Safety Board in Sweden from March 2023 and a mix effect towards B2B, solar and SpotOn which results in lower gross margins.
On 12 June 2023, The Norwegian Communications Authority announced that it will not object to the decision by the National Electrical Safety Board in Sweden to prohibit the sale of Easee EV chargers. Consequently, it will no longer be allowed to sell the current versions of the Easee EV chargers in Norway. By the end of May 2023, the Company has sold Easee EV chargers for approximately NOK 21 million with a gross margin of approximately 10% in Norway. The Company has an inventory of Easee chargers of NOK 21 million, of which NOK 10 million has not yet been paid. The Company is in dialogue with Easee regarding the handling of the inventory and it looks like there will be a good solution for this, but there is still a risk that the Group in Q2 2023 must write down a major part of the inventory of Easee chargers with a net value of NOK 11 million.
Further, for Q2 2023, the Company expects sales of NOK 300 - 350 million and EBITDA of NOK 23 – 28 million (not including the effects of the potential inventory write-down) for the group. The gross margin is expected to be somewhat higher than last year offset by cost increases in Q2 2023. Cost reductions have been implemented during Q2 as communicated in the Q1 reporting, but these cost reductions will not have any significant impact before H2 2023.
Norway: For H2 2023, Elektroimportøren expects the challenging market conditions to continue. The Company’s current expectation is that H2 2023 sales will be broadly in line with 2022, but with lower gross margin due to higher share of solar and SpotOn sales at lower gross margins. EBITDA margin is consequently expected to be lower for H2 2023 compared to the same period in 2022, but higher than the margin in Q1 2023.
Sweden: Online sales are down compared to last year and the new store is progressing slower on sales than expected. Both professional customers and consumers that visit the store are embracing the concept but too few customers are visiting. Market activities are in place to improve the awareness of the new concept for all customers groups. B2B sales representative will be in place after summer. EBITDA contribution in Sweden for H2 2023 is expected to be negative.
With the cost reduction initiatives implemented, continued traction within solar and the foundation built in Sweden, Elektroimportøren believes it will be well positioned for 2024.
However, as a result of the challenging market conditions, the outlook indicates that the Company would risk a covenant breach in Q2 2023. Therefore, the Company has agreed the Waiver Agreement with the bank on new interim covenants for the period until Q2 2024. Under the Waiver Agreement, the NIBD/EBITDA (NGAAP) covenant will be increased to maximum 4.5x in Q2 2023 and 4.0x from Q3 2023 until Q2 2024. Thereafter it will revert back to the original covenant. Further, the Company may not utilize its Capex facility until it has proven compliance with the covenants per Q3 2024. The parties have also agreed that the NIBD/EBITDA (NGAAP) covenant measurement shall be subject to certain adjustments. Finally, the Company will be subject to a minimum cash liquidity covenant of NOK 40 million (including cash and unused overdraft facility).
The Waiver Agreement is subject to the Company raising a gross amount of minimum NOK 100 million in new equity to strengthen the balance sheet and final documentation. The gross proceeds will remain with the Company and will not be used for repayment of debt. A separate news release related to the contemplated private placement will be released.
For further information, please see the attached Company presentation.
For more information, please contact:
Andreas Niss
CEO Elektroimportøren AS
+47 934 67 067
This information is considered to be inside information pursuant to the EU Market Abuse Regulation (MAR) and is subject to the disclosure requirements pursuant to MAR article 17 and Section 5-12 the Norwegian Securities Trading Act. This stock exchange announcement was published by Jørgen Wist, Chief Financial Officer at Elektroimportøren AS on 14 June 2023 at 16:30 CEST.
IMPORTANT NOTICE:
The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy, fairness or completeness. Neither the Manager nor any of its respective affiliates or any of their respective directors, officers, employees, advisors or agents accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available, or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith. This announcement has been prepared by and is the sole responsibility of the Company.
Neither this announcement nor the information contained herein is for publication, distribution or release, in whole or in part, directly or indirectly, in or into or from the United States, Australia, Canada, Japan, The Hong Kong Special Administrative Region of the People's Republic of China, South Africa or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. The publication, distribution or release of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
This announcement is not an offer for sale of securities in the United States. The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), and may not be offered or sold in the United States absent registration with the U.S. Securities and Exchange Commission or an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in accordance with applicable U.S. state securities laws. The Company does not intend to register any securities referred to herein in the United States or to conduct a public offering of securities in the United States.
Any offering of the securities referred to in this announcement will be made by means of a set of subscription materials provided to potential investors. Investors should not subscribe for any securities referred to in this announcement except on the basis of information contained in the aforementioned subscription material.
In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the EU Prospectus Regulation, i.e. only to investors who can receive the offer without an approved prospectus in such EEA Member State. The expression "EU Prospectus Regulation" means Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 (together with any applicable implementing measures in any Member State).
This communication is only being distributed to and is only directed at persons in the United Kingdom that are "qualified investors" within the meaning of the EU Prospectus Regulation as it forms part of English law by virtue of the European Union (Withdrawal) Act 2018 and that are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or (ii) high net worth entities, and other persons to whom this announcement 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"). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.
This announcement is made by, and is the responsibility of, the Company. The Manager and their affiliates are acting exclusively for the Company and no-one else in connection with the Private Placement. They will not regard any other person as their respective clients in relation to the Private Placement and will not be responsible to anyone other than the Company, for providing the protections afforded to their respective clients, nor for providing advice in relation to the Private Placement, the contents of this announcement or any transaction, arrangement or other matter referred to herein.
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, which any “manufacturer” (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Offer Shares in the Private Placement have been subject to a product approval process, which has determined that they each 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 (the “Positive Target Market”); and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the “Appropriate Channels for Distribution”). Distributors should note that: the price of the Offer Shares may decline and investors could lose all or part of their investment; the Offer Shares offer no guaranteed income and no capital protection; and an investment in the Offer Shares 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. Conversely, an investment in the Offer Shares is not compatible with investors looking for full capital protection or full repayment of the amount invested or having no risk tolerance, or investors requiring a fully guaranteed income or fully predictable return profile (the “Negative Target Market” and, together with the Positive Target Market, the “Target Market Assessment”).
The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Private Placement.
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 Offer Shares.
Each distributor is responsible for undertaking its own Target Market Assessment in respect of the Offer Shares in the Private Placement and determining appropriate distribution channels.
In connection with the Private Placement, the Manager and any of their affiliates, acting as investors for their own accounts, may subscribe for or purchase shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such shares and other securities of the Company or related investments in connection with the Private Placement or otherwise. Accordingly, references in any subscription materials to the shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, such Manager and any of their affiliates acting as investors for their own accounts. The Manager does not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.
Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "aim", "expect", "anticipate", "intend", "estimate", "will", "may", "continue", "should" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies, and other important factors which are difficult or impossible to predict and are beyond its control. 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. Forward-looking statements speak only as of the date they are made and cannot be relied upon as a guide to future performance. The Company, the Manager and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future developments or otherwise. The information, opinions and forward-looking statements contained in this announcement speak only as at its date and are subject to change without notice.