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Reference is made to the stock exchange notice published by Storm Real Estate ASA (“Storm Real Estate” or the “Company”) on 17 November 2020, where the Company announced that it had entered into a transformative agreement to form a combined entity with KMC Properties (“KMC”) and, as part of the transaction (the "Transaction”), intended to carry out a private placement of NOK 300 million. The Company also recently successfully completed placement of a NOK 1,850 million senior secured bond.
“Through this transaction, we will be fully funded and ready to execute on our strategy. We have strong ambitions for growth, aiming at doubling our portfolio value within the next five years, in addition to expectations for dividend distributions,” says Liv Malvik, CEO of KMC Properties and the combined entity.
The combined entity of Storm Real Estate and KMC Properties has a portfolio of attractive industrial properties with solid tenants, and an average of 12 years remaining lease agreements.
The Company contemplates a private placement of up to 42,857,142 new shares (the "Offer Shares"), at an offer price of NOK 7.00 per share (the “Private Placement“), raising gross proceeds of up to NOK 300 million. ABG Sundal Collier ASA and DNB Markets, a part of DNB Bank ASA are acting as joint bookrunners (the “Joint Bookrunners”) in connection with the Private Placement.
The net proceeds from the Private Placement will, along with the recently completed bond issue, be used to finance the new company’s growth ambitions, including purchase and development of new properties, as well as expansion of existing properties. In addition, the proceeds will be used to refinance existing bank debt and part of shareholder loans in KMC, as well as general corporate purposes.
The Private Placement is fully underwritten by Bekken Invest AS, Kastor Invest AS, Kverva Industrier AS, Aconcagua Management Ltd. and certain other shareholders and investors. The underwriters will receive a 2% underwriting commission, provided the Transaction and the Private Placement are concluded. The Private Placement will be directed towards Norwegian and international institutional investors, in each case subject to and in compliance with applicable exemptions from relevant prospectus or registration requirements.
Completion of the Private Placement is subject to (i) the necessary corporate resolutions of the Company resolving to consummate the Private Placement and allocate the Offer Shares, including an extraordinary general meeting to be held on 18 December 2020 (the “EGM”) approving the Transaction and granting a board authorization to issue the new shares in the Private Placement, (ii) the Board resolving to issue the new shares in the Private Placement pursuant to the board authorization, (iii) satisfaction or waiver of all conditions for completion of the Transaction; and (iv) payment and registration of the share capital increases in the Company pertaining to the Private Placement with the Norwegian Registry of Business Enterprises.
Existing shareholders being allocated shares in the Private Placement undertake to vote in favor of the Private Placement.
The subscription price in the Private Placement is fixed at NOK 7.00 per share. The application period commences today at 09:00 CET and will close at 16:30 CET on 11 December 2020. The application period may, at the discretion of the Company and the Joint Bookrunners, close earlier or later and may be cancelled at any time and consequently, the Company may refrain from completing the Private Placement. The Company will announce the final number of Offer Shares placed in the Private Placement in a stock exchange announcement expected to be published before the opening of trading on the Oslo Stock Exchange on 14 December 2020.
The allocation will be determined at the end of the application period and final allocation will be made at the Board of Directors' sole discretion. The minimum subscription and allocation amount in the Private Placement will be the NOK equivalent of EUR 100,000, provided that the Company may, at its sole discretion, allocate an amount below EUR 100,000 to the extent applicable exemptions from the prospectus requirement pursuant to applicable regulations, including the Norwegian Securities Trading Act and ancillary regulations, are available.
Notification of conditional allotment and payment instructions is expected to be issued to the applicants on or about 14 December 2020 through a notification to be issued by the Joint Bookrunners.
The settlement date for the Offer Shares allocated in the Private Placement is expected to be on or about 23 December 2020 on a delivery-versus-payment basis (DVP). The new shares issued in connection with the Private Placement will be placed on separate ISIN pending (i) expiry of the offer period under the mandatory offer (as described in the stock exchange notice published on 17 November 2020) and (ii) approval of a prospectus to be published by Storm Real Estate following completion of the Transaction. The shares which will be issued in the Private Placement will not be comprised by the Mandatory Offer, and investors subscribing for offer shares in the Private placement will hence not be able to tender their shares, or otherwise agree to not permit such shares to be tendered, in the Mandatory Offer. The Offer Shares are expected to be tradable on the Oslo Stock Exchange by end of January 2021. The Company will seek to register the new shares issued in the Private Placement for trading on the Norwegian OTC Market owned by the OSE (N-OTC) for the interim period until the Prospectus is approved and the Mandatory Offer is completed.
Subject to successful completion of the Private Placement and approval by the EGM, the Company plans to carry out a subsequent offering in the Company (the "Subsequent Offering") directed towards shareholders in the Company as of 7 December 2020 (as registered in the VPS on 9 December 2020) who were not allocated shares in the Private Placement and who are not resident in a jurisdiction where such offering would be unlawful or, for jurisdictions other than Norway, would require any prospectus, filing, registration or similar action. Such shareholders will be granted non-transferable preferential rights to subscribe for, and, upon subscription, be allocated new shares. The subscription price in such Subsequent Offering will be the same as the subscription price in the Private Placement, i.e. NOK 7.00 per share. The shares issued in the Subsequent Offering will not be comprised by the mandatory offer as described above, as such mandatory offer will be completed prior to the commencement of the offer period in the Subsequent Offering. Existing shareholders being allocated shares in the Private Placement will undertake to vote in favor of the approval of issuance of shares in the Subsequent Offering at the EGM.
The Board of Directors has considered the Private Placement in light of the equal treatment obligations under the Norwegian Securities Trading Act and Oslo Børs' Circular no. 2/2014, and is of the opinion that the proposed Private Placement is in compliance with these requirements. The Board of Directors of Storm Real Estate is of the view that the refinancing will be in the common interest of the Company and its shareholders, and the Private Placement is a pre-requisite for such refinancing. Furthermore, the Board of Directors has proposed to implement the Subsequent Offering in order to preserve the interests of shareholders not participating in the Private Placement.
For further information, please contact:
Liv Malvik, CEO KMC Properties AS, +47 480 03 175
Charlotte Knudsen, KMC Properties AS, tel. +47 9756 1959
Morten E. Astrup, Storm Real Estate ASA, tel. +41 78927 8855
This information is subject of the disclosure requirements of section 5-12 of the Norwegian Securities Trading Act.
Important Notices
This announcement is not and does not form a part of any offer to sell, or a solicitation of an offer to purchase, any securities of the Company. The distribution of this announcement and other information may be restricted by law in certain jurisdictions. Copies of this announcement are not being made and may not be distributed or sent into any jurisdiction in which such distribution would be unlawful or would require registration or other measures. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.
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 "Securities Act"), and accordingly may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and in accordance with applicable U.S. state securities laws. The Company does not intend to register any part of the offering or their securities in the United States or to conduct a public offering of securities in the United States. Any sale in the United States of the securities mentioned in this announcement will be made solely to "qualified institutional buyers" as defined in Rule 144A under the Securities Act.
In any member state of the EEA ("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 Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The expression "Prospectus Regulation" means Regulation 2017/1129 as amended 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 (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 for 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.
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", "expect", "anticipate", "strategy", "intends", "estimate", "will", "may", "continue", "should" and similar expressions. The forward-looking statements in this announcement 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.
Actual events may differ significantly from any anticipated development due to a number of factors, including without limitation, changes in investment levels and need for the Company’s services, changes in the general economic, political and market conditions in the markets in which the Company operate, the Company’s ability to attract, retain and motivate qualified personnel, changes in the Company’s ability to engage in commercially acceptable acquisitions and strategic investments, and changes in laws and regulation and the potential impact of legal proceedings and actions. 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 provide any guarantees that the assumptions underlying the forward-looking statements in this announcement are free from errors nor does it accept any responsibility for the future accuracy of the opinions expressed in this announcement or any obligation to update or revise the statements in this announcement to reflect subsequent events. You should not place undue reliance on the forward-looking statements in this announcement.
The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice. The Company does not undertake any obligation 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 announcement.
Neither of the Joint Bookrunners nor any of their respective affiliates makes any representation as to the accuracy or completeness of this announcement and none of them accepts any responsibility for the contents of this announcement or any matters referred to herein.
This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities in the Company. Neither the Joint Bookrunners nor any of their respective affiliates accepts any liability arising from the use of this announcement.