· Fully underwritten rights issue of ordinary shares of approximately SEK 458m with preferential rights for ordinary shareholders · Convertible bond issue in the nominal amount of SEK 500m, directed to and placed with institutional and qualified investors in Sweden and internationally · Agreement on long-term debt financing with existing lenders extended to year end 2018, conditional upon successful completion of the issuances · The new issues are carried out in order to amortize on bank loans and to create greater financial flexibility and the ability to realize the company’s strategy · Extraordinary general meeting will be held on 9 March 2015 for approval of the new issues The Board of Directors of Eniro AB (publ) (“Eniro” or the “Company”) has on the 5 February 2015 decided, subject to EGM approval, on a fully underwritten rights issue of ordinary shares of approximately SEK 458m and a convertible bond issue in the nominal amount of SEK 500m directed to and placed with institutional and qualified investors in Sweden and internationally. Eniro has renegotiated its loan agreement with the bank syndicate, and subject to completion of the issuances the Company will have extended maturity and a significantly lower amortization rate. The proposed transactions are done in order to amortize on bank loans, to create greater financial flexibility and ability to realize the Company’s strategy. Stefan Kercza, CEO and President of Eniro, comments: “Eniro offers attractive digital search products, but now we are taking the next step in the transformation. We aim to increase profitability by adding new related services to the product portfolio, continue with the streamlining of the organization and to fully exploit our unique database, strong sales force and well-known brands. The proposed transactions and the agreement to amend the loan agreement increase the financial flexibility of the Company, which is an important prerequisite in the work of realizing our strategy on the growing digital media market.” Background and reasons The media market has changed considerably in recent years. The digital marketing segment has grown rapidly, currently representing more than one third of the media market in Scandinavia. Eniro has been early in the transition. From being a catalogue company, the Company today offers a complete digital product range where digital segments represented 88 per cent of total advertising revenues in 2014. The fact that the Company is offering a value adding and appreciated product is proven by the approximately 8 million unique visitors on Eniro’s sites every week and the approximately 250,000 customers that have chosen to increase visibility in Eniro’s different marketing channels. During the fall of 2014, Eniro went through a leadership change and the new management has a clear strategic focus to follow in the coming years. The aim is to make Eniro’s products even more attractive and create a more customer- and market oriented sales organization. Going forward, Eniro will work more clearly with business development and focus on related services that complement and add value to the current local search offerings. The new focus along with Eniro’s unique and extensive local database, the 1,300 people strong sales force and well-known brands, provide the potential to create additional business opportunities in the growing digital media market and increase profitability. In parallel with the work to strengthen its position in local search, the Company is handling the shrinking but continuously profitable Print and Voice segments. At the end of 2014, after a SEK 1.3bn reduction of debt during the past three years, Eniro’s net debt amounted to approximately SEK 2.2bn. During the same period, Eniro has put a strong focus on optimizing the cost structure and has implemented cost savings exceeding SEK 900m. Despite these initiatives, the Company has a relatively high net debt level in relation to the Company’s current profitability. As part of the review of the Company’s capital structure, Eniro has agreed on amendments to the loan agreement with the bank syndicate, subject to completion of the issuances. Among other things, the new agreement means an extension of the maturity and a significantly lower amortization rate, which provides greater financial flexibility and discretion. Due to these circumstances, the Board of Directors of Eniro has decided, subject to EGM approval, on a fully underwritten rights issue of ordinary shares of approximately SEK 458m and a directed convertible bond issue in the nominal amount of SEK 500m before issue costs. The aggregate issue proceeds are expected to be SEK 933m before transaction costs, whereof at least SEK 650m will be applied towards repayment of the Company’s bank debt. The purpose of the issuances is to amortize on the bank loans and to create a greater financial flexibility to realize the Company’s plans to increase focus on digital search and expansion in digital marketing. Thus, additional value will be created for the Company’s shareholders and other stakeholders. Subscription undertakings and guarantee commitments Shareholders holding approximately 18 per cent of the ordinary shares of Eniro, including Nortal Capital AB (a company controlled by Staffan Persson, member of the Board of Directors), Danske Capital and Lars-Johan Jarnheimer (Chairman of the Board of Directors), have submitted binding subscription commitments to subscribe for shares corresponding to their pro rata shares of the rights issue and have undertaken to vote in favour of the rights issue and the directed convertible bond issue at the EGM. The remaining part of the rights issue, approximately 82 per cent, is underwritten by a consortium, mainly consisting of Swedish institutional and qualified investors, including Catella and Bure Equity. The subscription undertakings and guarantee commitments are conditional upon EGM approval of the issuances, the existing term facilities with the bank syndicate not being declared due and payable and the agreement with the bank syndicate not being terminated. Guarantee commission and statement from the Swedish Securities Council The Company pays a guarantee commission corresponding to 5 per cent of the guaranteed amount. Two of the Company’s largest shareholders, Nortal Capital AB and Danske Capital will be paid the same commission for their subscription undertakings as the other guarantors. The case has at the Company's request been examined by the Swedish Securities Council and the Board of Directors has carefully considered the council's statement before its decision to approve the commission. Rights issue The Board of Directors has decided, subject to EGM approval, on a rights issue of ordinary shares of approximately SEK 458m before issue costs where the Company’s current shareholders of ordinary shares have preferential rights. Each existing ordinary share in Eniro entitles to three (3) subscription rights. One (1) subscription right entitles the holder to subscribe for one (1) new ordinary share. The terms of the rights issue means that no more than 305,642,220 new ordinary shares will be issued at a subscription price of SEK 1.50 per ordinary share. Based on the closing price on 5 February 2015, the subscription price of SEK 1.50 implies a discount of approximately 46 per cent after separation of the subscription rights and 41 per cent based on the volume weighted average share price during the 15 trading days preceding the Board of Directors’ decision. The record date at Euroclear Sweden AB for the right to receive subscription rights is 12 March 2015. The subscription period (subscription through payment) runs from 16 March 2015 until and including 30 March 2015, or such later date as decided by the Board of Directors. Trading in subscription rights on Nasdaq Stockholm is expected from 16 March until and including 26 March 2015. Assuming full subscription, the number of ordinary shares in the Company will increase from 101,880,740 ordinary shares to 407,552,960 ordinary shares. Total issue proceeds amounts to approximately SEK 458m before issue costs when the issue is fully subscribed. For existing shareholders who do not participate in the new issue, a dilution effect arises corresponding to approximately 75 per cent of the total number of shares and votes in the Company after the issue. Shareholders of ordinary shares who choose not to participate in the rights issue are able to compensate for this dilution by selling their subscription rights in the market. Preliminary time table for the rights issue +-------------+---------------------------------------------------------------+ |9 March 2015 |Extraordinary General Meeting to approve the rights issue | | |resolved by the Board of Directors | +-------------+---------------------------------------------------------------+ |10 March 2015|Last day of trading in the ordinary shares including right to | | |participate in the rights issue | +-------------+---------------------------------------------------------------+ |11 March 2015|First day of trading in the ordinary shares excluding right to | | |participate in the rights issue | +-------------+---------------------------------------------------------------+ |12 March 2015|Record date for participation in the rights issue, i.e. | | |shareholders who are registered in the share register as of | | |this day will receive subscription rights for participation in | | |the rights issue | +-------------+---------------------------------------------------------------+ |13 March 2015|Estimated date for the publication of the prospectus | +-------------+---------------------------------------------------------------+ |16 March 2015|Ordinary shareholders that do not wish to subscribe for | |– 26 March |ordinary shares in the rights issue may during this period sell| |2015 |their subscription rights to benefit from their value | +-------------+---------------------------------------------------------------+ |16 March 2015|Subscription period | |– 30 March | | |2015 | | +-------------+---------------------------------------------------------------+ |10 April 2015|Estimated date of publication of the final results of the | | |rights issue | +-------------+---------------------------------------------------------------+ Convertible bond issue The Board of Directors has decided, subject to EGM approval, to issue a convertible bond in the nominal amount of SEK 500m and a coupon of six per cent per annum. The subscription price is 95 per cent of the nominal amount and the expected capital injection is SEK 475m before transaction costs. The convertible bond issue is directed to and placed with a consortium of Swedish and international institutional and qualified investors. The term of the loan is five years with an expected maturity date in April 2020 if not converted to ordinary shares or repaid earlier. The initial conversion price is SEK 1.95, corresponding to a conversion premium of 30 per cent above the subscription price. The potential dilution effect on the share capital from the convertible loan is 39 per cent after completion of the rights issue. The placing of the convertible bond issue is conditional upon e.g. EGM approval of the issuances and the Company’s existing term loans not being declared due and payable or the amendment agreement with the bank syndicate not being terminated. Agreement on long-term financing with existing bank syndicate Eniro has reached an agreement with its existing bank syndicate regarding long -term financing until the end of 2018. The amendment agreement is conditional upon the successful completion of the issuances and the amendment agreement is effective when the issuances have been completed. The amendment agreement covers two term loan facilities and one revolving credit facility. The first loan facility amounts to SEK 1,100m and is repaid on a semi-annual basis in the total amount of SEK 150m per year, beginning on 30 June 2015. The second loan facility amounts to SEK 600m and is repaid on a semi-annual basis in the total amount of SEK 25m per year, beginning on 30 June 2016. The revolving credit facility amounts to SEK 150m. The interest on the facilities is a reference rate plus a margin. For the first facility and the revolving credit facility, the margin is 4.00 per cent as a starting point. If the ratio of total net debt to EBITDA is less than 1.5, the margin is 3.50 per cent. For the second facility, the margin is initially 5.00 per cent. Extraordinary general meeting on 9 March 2015 The Board of Directors has convened an extraordinary general meeting to be held on 9 March 2015 as set out in the separate notice. The extraordinary general meeting is proposed to resolve to approve the Board of Director’s resolutions on issuances and to pass related resolutions such as reduction of share capital, bonus issue and amendments to the articles of association’s restrictions as to the share capital and the number of shares. Conference Call Friday, February 6, 2015, at 10:00 (CET) Eniro invites investors and media to a telephone conference (in English) February 6, 2015 at 10:00 (CET), where CEO Stefan Kercza and CFO Roland M. Andersen will present and comment on the report and the issues and answer questions. The report will be available on Eniro’s website www.enirogroup.com from 08:00am the same day. To participate in the telephone conference, please dial +46 (0) 8 56642698 (Sweden) or at +44 (0) 203 4281431] (UK). Financial and legal advisors ABG Sundal Collier AB is acting as financial advisor and Gernandt & Danielsson Advokatbyrå KB is the legal advisor to Eniro in connection with the proposed transactions. For more information, please contact: Stefan Kercza, President and CEO, Tel: +46 8 553 310 00 Roland M. Andersen, CFO, Tel: +46 8 553 310 00 Cecilia Ketels, Acting Head of Investor Relations, 46 721 572 907, email: cecilia.ketels@eniro.com This information is such that Eniro AB (publ) is required to disclose in accordance with the Swedish Financial Instruments Trading Act and/or the Swedish Securities Market Act. The information was submitted for publication at 08:10 CET on February 6, 2015. Eniro is a search company that aggregates, filters and organizes local information. Our growth is driven by users’ increasing mobility and multiscreen behavior, where we are at the forefront with modern technical solutions. For more than 100 years Eniro has helped people find local information and companies find customers. Today it is a multiscreen solution – our users search for information using their smart phones, tablets and desktops. This creates great business opportunities for us as the local search company. Mobile advertising is today the fastest growing part of Eniro’s business. Eniro is the local search engine. A smart shortcut to what you need, no matter where you are or where you are going. Eniro is one of the largest search companies in the Nordic region and Poland. The company has approximately 2,300 employees and has been listed on NASDAQ OMX Stockholm since 2000. During 2014, Eniro’s revenues amounted to SEK 3,002 M and EBITDA was SEK 631 M. Approximately 88 percent of Eniro’s advertising revenues come from multiscreen channels. The company’s headquarters are located in Stockholm, Sweden. More on Eniro at www.enirogroup.com. Eniro – Discover local. Search local.
Eniro announces fully underwritten rights issue of ordinary shares and a placed directed issue of convertible bonds
| Source: Eniro AB