Sponda Plc Stock exchange release 29 April 2011 at 12.30
SPONDA PLC PURCHASES THE FENNIA QUARTER FROM SUOMI MUTUAL LIFE ASSURANCE COMPANY. SPONDA PLC'S BOARD OF DIRECTORS DECIDES ON A DIRECTED SHARE ISSUE TO THE SELLER.
With a sale and purchase agreement signed today, Sponda Plc ('Sponda') will purchase from Suomi Mutual Life Assurance Company ('Suomi Mutual') the Fennia Quarter located in the Helsinki Central Business District and consisting of all the shares in six real estate companies and a portion of the shares in a company managing the Kaisaniemi metro hall. The Fennia Quarter has a total of approximately 25,500 m2 of office space and approximately 14,200 m2 of business premises. On the date of closing, the vacancy rate of this entity was approximately 9.7 per cent. The net initial yield of the object is approximately 5.7 per cent.
Sponda will pay to Suomi Mutual for the entity a total of EUR 122,000,000 as debt-free purchase price, of which EUR 100,000,000 less the net debt of the target has been paid in cash in connection with the signing of the purchase. In addition to the cash payment, Sponda's Board of Directors has decided to pay a part of the purchase price through an issue of 5,500,000 new shares in Sponda directed to Suomi Mutual based on the share issue authorization given by Sponda's Annual General Meeting of Shareholders on 16 March 2011.
Grounds for the Purchase
One of Sponda's key strengths is its property portfolio that is concentrated in the best locations in the Helsinki Metropolitan Area. The purchase of the Fennia Quarter supports Sponda's strategy and strengthens the property portfolio of Sponda's Investment Properties business unit. The major tenants in the entity are Finland's Slot Machine Association, Finnkino and the City of Helsinki. The concluded purchase will have a positive impact on Sponda's net assets per share and cash flow per share already in 2011. The Company has estimated that Finland's property market will see a positive turn during the ongoing year, and the anticipated rise in rents in the central Helsinki area in particular will have a positive impact on the profitability of the Fennia Quarter in the future.
The title to the Fennia Quarter passed to Sponda in connection with signing the sale and purchase agreement, and the entity will increase Sponda's rental income from the beginning of May 2011. The purchase was concluded on normal market terms.
Directed Issue
In addition to the cash payment, Sponda's Board of Directors decided to issue 5,500,000 new shares in Sponda to Suomi Mutual through a directed issue based on the share issue authorization given by Sponda's Annual General Meeting of Shareholders on 16 March 2011. The share issue will be carried out against a contribution in kind. Suomi Mutual subscribed for all the shares at a subscription price of four euros (EUR 4.00) per share. This is the closing price of the share as at 29 March 2011 and exceeds the equity per share adjusted by dividends as at 31 December 2010 as well as the average price of Sponda's shares adjusted by dividends in February 2011. Thus, the total value of the share consideration was EUR 22,000,000. Sponda's Board of Directors believes that the subscription price per share determined in connection with the purchase is justified as part of the totality of the purchase of the Fennia Quarter.
On the aforementioned grounds, Sponda's Board of Directors finds that there is a weighty financial reason for carrying out the share issue in deviation from the shareholders' pre-emptive rights in connection with the purchase of the Fennia Quarter.
Sponda's Board of Directors has received an opinion on the value of the Fennia Quarter from Advium Corporate Finance Ltd, who acted as Sponda’s financial advisor in the transaction. According to Advium Corporate Finance Ltd's opinion, the purchase price of the Fennia Quarter on the aggregate corresponds to the fair value of the entity and is financially reasonable.
The shares issued to Suomi Mutual will entitle their holder to shareholder's rights after the shares have been registered in the Finnish Trade Register and in Sponda's shareholders' register, on or about 5 May 2011. Sponda will file an application to NASDAQ OMX Helsinki Ltd for the admission of the new shares to public trading. The shares will be incorporated in the book-entry system and will become subject to public trading on the official list of NASDAQ OMX Helsinki Ltd on or about 6 May 2011. On 20 April 2011, the Finnish Financial Supervisory Authority granted to Sponda an exemption from the duty to publish a prospectus related to the listing of new shares.
The new shares to be issued to Suomi Mutual will represent approximately 1.94 per cent of all Sponda's shares after the directed issue has been registered. After the registration, Sponda will have a total of 283,075,462 shares. The subscription price of the new shares will be credited to the invested unrestricted equity reserve and Sponda's share capital will remain unchanged at EUR 111,030,185.
Helsinki, 29 April 2011
Sponda Plc
For additional information, please contact:
Kari Inkinen, President and CEO, tel. +358 400 402 653;
Erik Hjelt, CFO, tel. +358 400 472 313; and
Pia Arrhenius, Senior Vice President, Corporate Communications and IR, tel. +358 40 527 4462
THIS RELEASE IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, EITHER IN FULL OR PARTIALLY, IN OR INTO THE UNITED KINGDOM, UNITED STATES, CANADA, AUSTRALIA, HONG KONG, SINGAPORE OR JAPAN OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL. THIS RELEASE IS NOT A DIRECT OR INDIRECT OFFER OF SECURITIES IN THE UNITED KINGDOM, UNITED STATES, CANADA, AUSTRALIA, HONG KONG, SINGAPORE OR JAPAN OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL OR WOULD REQUIRE PROSPECTUS, ANY RELATED REGISTRATION OR ANY OTHER ACTIONS ACCORDING TO APPLICABLE RULES OF THAT JURISDICTION. 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 HAS NOT REGISTERED, AND 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.
ANNEX: TERMS AND CONDITIONS OF THE SHARE ISSUE
The Annual General Meeting of Sponda Plc (the 'Company' or 'Sponda') authorized on 16 March 2011 the Company's Board of Directors to decide on the issue of a maximum of 27,757,000 new shares. The share issue may be carried out by offering new shares or by transferring treasury shares. Based on this authorization, the Board of Directors is authorized to decide on a directed share issue in deviation from the shareholders' pre-emptive rights and on the granting of special rights subject to the conditions mentioned in the Companies Act. The Board of Directors can act on this authorization in one or several tranches. The Board of Directors can use the authorization to finance or carry out corporate acquisitions or other restructuring, to strengthen the Company's capital structure, or for other purposes decided by the Board of Directors. The authorization may not, however, be used for the implementation of incentive schemes for the Company's management or key personnel. The Board of Directors is authorized to decide on other conditions of the share issue and issuance of special rights. The authorization is in force until the next Annual General Meeting.
Based on the authorization granted by the Annual General Meeting, the Company's Board of Directors has decided on 29 April 2011 on the issue (the 'Share Issue') of a total of 5,500,000 new shares in the Company (the 'New Shares') in accordance with these terms and conditions of the Share Issue to Suomi Mutual Life Assurance Company (the 'Company Entitled for Subscription'). The New Shares form a part of the purchase price to be paid to the Company Entitled for Subscription for the so-called Fennia Quarter in accordance with the sale and purchase agreement (the 'Sale and Purchase Agreement') signed on 29 April 2011 between the Company and the Company Entitled for Subscription.
As a result of the Share Issue, the total number of shares in the Company will increase from 277,575,462 shares to 283,075,462 shares. The New Shares will represent 1.98 per cent of Sponda's existing shares and the related voting rights before the Share Issue and 1.94 per cent of the existing shares and the New Shares and the related voting rights after the Share Issue.
1. Subscription Right
The New Shares will be offered, in deviation from the shareholders' pre-emptive right set forth in Chapter 9(3) of the Companies Act, for subscription by the Company Entitled for Subscription.
The shares to be issued form a part of the purchase price to be paid to the Company Entitled for Subscription for the so-called Fennia Quarter. The purchase of the Fennia Quarter supports Sponda's strategy and strengthens the property portfolio of Sponda's Investment Properties business unit. Sponda's Board of Directors finds that there is a weighty financial reason for carrying out the Share Issue in deviation from the shareholders' pre-emptive rights in connection with the purchase of the Fennia Quarter.
2. Subscription Price
The subscription price of the New Shares is EUR 4.00 per share (or a total of EUR 22,000,000 for the New Shares) (the 'Subscription Price'), which will be credited in full to the invested unrestricted equity reserve of the Company. The Subscription Price corresponds to the closing price of the share as at 29 March 2011 and exceeds the equity per share adjusted by dividends as at 31 December 2010 as well as the average share price adjusted by dividends in February 2011. The subscription price per share determined in connection with the purchase is justified as part of the totality of the purchase of the Fennia Quarter.
3. Subscription Period
In the Sale and Purchase Agreement, the Company Entitled for Subscription has in advance and irrevocably declared that it will subscribe for the New Shares, and the Company's Board of Directors has undertaken to accept these subscriptions in the Sale and Purchase Agreement. The Subscription Period ends when the meeting of the Board of Directors is closed on 29 April 2011.
4. Subscribing and Paying the Shares
The Company Entitled for Subscription will subscribe for the New Shares through a separate subscription list.
The Subscription Price of the New Shares will be paid as contribution in kind by transferring the contribution in kind to the Company on 29 April 2011 in accordance with the terms and conditions of the Sale and Purchase Agreement. The contribution in kind consists of the following shares:
i. Kiinteistö Oy Mikonkatu 19: shares No 1–7,356
ii. Kiinteistö Oy Mikonkatu 17: shares No 1–15,000
iii. Oy Mikonlinna Ab: shares No 1–10,000
iv. Kiinteistö Oy Kaisaniemenkatu 2 B: shares No 1–38,228
v. Kiinteistö Oy Paulon Talo: shares No 1–36,677
vi. Kiinteistö Oy Helsingin Vuorikatu 14: shares No 1–72,600
vii. Kiinteistö Oy Kaisaniemen Metrohalli: shares No 12,251 – 13,271 and 13,655 – 15,450.
5. Registration of Shares to a Book-entry Account and Trading
The Company will file an application to NASDAQ OMX Helsinki Ltd for the admission of the New Shares to public trading. The shares will be incorporated in the book-entry system and will become subject to public trading on the official list of NASDAQ OMX Helsinki Ltd on or about 6 May 2011.
6. Shareholders' Rights
The Offer Shares will carry the right to dividends distributed by the Company and the right to other distribution of funds as well as other shareholder rights in the Company once the New Shares have been registered with the Trade Register, on or about 5 May 2011. The New Shares will rank pari passu with all shares in Sponda. Each New Share entitles its holder to one vote at the General Meeting of Shareholders of the Company.
7. Finnish Transfer Tax
No transfer tax is payable on the subscription for the New Shares.
8. Governing Law
The Share Issue shall be governed by the laws of Finland.
9. Other Matters
The Company's Board of Directors will decide on other circumstances and practical measures related to the Share Issue, if necessary.