NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART DIRECTLY OR INDIRECTLY, IN AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES OR ANYOTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED HEREIN.
Oslo, 17 June 2019
Thin Film Electronics ASA ("Thin Film" or the "Company") has retained Carnegie AS and DNB Markets (a part of DNB Bank ASA) as managers (the "Managers") to advice on and effect a private placement of new shares directed towards Norwegian and international investors (the "Private Placement"). In the Private Placement, the Company is contemplating to raise up to the NOK equivalent of USD 16 million by issuing new shares in the Company (the "Offer Shares").
The net proceeds from the Private Placement, combined with sales proceeds the Company targets to realise from the roll-to-roll printed dopant polysilicon (PDPS) facility in 2019, are intended to fully fund the Company until cash break-even in 2021.
As announced, Thin Film has begun exploring different applications for the roll-to-roll PDPS facility in San Jose and has started to pursue a number of paths to maximize the value of the assets and the technology. Management's goal is to focus on realizing value from the facility, the technology, and the intellectual property as a whole.
Since the acquisition of Kovio technology, intellectual property and manufacturing assets in January 2014, Thin Film has per April 2019 undertaken technology development related spend of USD 152 million. Roll-to-roll equipment and process spend represent USD 96 million, of which the physical installed equipment represents approximately USD 37m. The equipment and facility have many alternative use cases within a range of other product categories, including for the production of flexible large-area electronics applications, flexible sensors, novel energy conversion devices, thin and flexible batteries, displays, and barriers. The Company is currently engaging with multiple parties and is pursuing a structured approach within the different alternative product categories. Through a structured sales process, the company expects to recover an amount above of what has been invested in equipment of the roll-to-roll PDPS facility.
As part of the transformation and the Company's new go-to-market strategy, Thin Film has signed exclusive customer partnership agreements with Tapì Group and BERICAP, two global leaders in the cap and closures industry. Through collaboration with these established strategic channel partners, Thin Film management aims to develop volume and scale. As communicated at the Investor day 24 April 2019, indicative volume per strategic channel partner is around 100 million units per partner on average. The volume commitments in the agreements with Tapì Group and BERICAP are supportive of these volume indications.
At the Investor day held on 24 April 2019, the Company communicated that it will reduce its annual operating expenses from USD 55 million in 2017 to a run-rate level of USD 34 million from 2019. Thin Film management will make continued efforts to optimise operations, including further reductions in annual run-rate cost in-line with business levels, which among other areas include several USD million reduction in lease costs.
The subscription price in the Private Placement will be determined by the Company's Board of Directors through an accelerated bookbuilding process. The minimum subscription and allocation in the Private Placement has been set to the number of Offer Shares that equals an aggregate subscription price of at least the NOK equivalent of EUR 100,000, provided that the Company may, at its sole discretion, offer and allocate an amount below EUR 100,000 to the extent applicable exemptions from the prospectus requirement pursuant to applicable regulations are available.
The bookbuilding period for the Private Placement will commence today, 17 June 2019, at 09:00 hours (CEST) and is expected to close on 20 June 2019 at 16:30 hours (CEST). The Company may, however, at any time resolve to close or extend the bookbuilding period at its own discretion and for any reason.
The Company will announce the final number of Offer Shares placed and the final subscription price in the Private Placement in a stock exchange announcement. Notification of conditional allotment and payment instructions will be communicated to the applicants by the Managers on or about 21 June 2019, subject to any shortenings or extensions of the bookbuilding period.
Completion of the Private Placement by the delivery of Offer Shares is subject to the approval by an Extraordinary General Meeting expected to be held on or about 12 July 2019 (the "EGM") and a listing prospectus being approved by the Financial Supervisory Authority of Norway (the "NFSA") and published (expected within July 2019). Further to this, completion of the Private Placement is subject to (i) the Company resolving to consummate the Private Placement and allocate the Offer Shares, and (ii) registration of the share capital increase in the Company pertaining to the issuance of Offer Shares with the Norwegian Register of Business Enterprises. If necessary, the Board will propose for the EGM to reduce the par value of the Company's shares by way of a capital reduction and also a subsequent share consolidation to obtain an adequate trading price of the shares.
Settlement of the allocated Offer Shares is expected to take place on a delivery versus payment basis shortly after the approval by the EGM. The Offer Shares will be tradable on the Oslo Stock Exchange upon registration of the share capital increase pertaining to the Private Placement with the Norwegian Register of Business Enterprises and a listing prospectus being approved by the NFSA. The Company expects that the listing prospectus will be approved by the NFSA on or about 20 July 2019. If there is a delay in the approval process with the NFSA, the Offer Shares will be registered on a separate ISIN number until the approval of a listing prospectus and will be sought listed, and thus be tradable, on Merkur Market as soon as practically possible after the EGM until a listing prospectus has been approved by the NFSA and published. However, the Offer Shares will not be tradeable prior to registration of the share capital increase pertaining to the Private Placement with the Norwegian Register of Business Enterprises.
The Board has resolved to launch the contemplated share issue as a private placement based on advice from the Managers following their discussions with existing shareholders and potential investors. After having considered alternative transaction structures and the Company's liquidity needs, the Board is of the view that a private placement is in the best interest of the Company and its shareholders.
Subject to successful completion of the Private Placement, the Board of Directors plan to carry out a subsequent offering of new shares in the Company directed towards shareholders in the Company as of 14 June 2019 (as registered in the VPS on 18 June 2019) who were not allocated Offer 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.
Please find enclosed an updated investor presentation and on the Company's website.
Kevin Barber - Chief Executive Officer (Investors)
Tel: +1 408 503 7306
Ole R. Thorsnes - Chief Financial Officer (Investors)
Tel: +47 918 66 697
This announcement is not and does not form a part of any offer for sale of securities.
Copies of this announcement are not being made and may not be distributed or sent into the United States, Australia, Canada, Japan or any other jurisdiction in which such distribution would be unlawful or would require registration or other measures.
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 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 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 prospectus.
This announcement is not a prospectus for the purposes of Directive 2003/71/EC (together with any applicable implementing measures in any Member State, the "Prospectus Directive"). Investors should not subscribe for any securities referred to in this announcement except on the basis of information contained in the aforementioned prospectus. In any EEA Member State other than Norway that has implemented the Prospectus Directive, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State.
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The information, opinions and forward-looking statements contained in this announcement speak only as of its date, and are subject to change without notice.