TRANSCOM ANNOUNCES FULLY UNDERWRITTEN RIGHTS ISSUE OF SEK 500 MILLION
This press release may not be announced, published or disseminated, in
whole or in part, directly or indirectly, in the United States of
America, Canada, Japan, Hong Kong or Australia
Luxembourg, 19 October 2011
· Rights issue of approximately SEK 500 million with preferential
subscription rights for Transcom's shareholders
· The rights issue is fully underwritten by Transcom's largest
shareholders
· The terms of the rights issue, including subscription price, will be
determined and announced around November 17, 2011
· Subject to the approval of the rights issue by the Extraordinary
General Meeting on November 21, 2011, the subscription period is
expected to be from November 29 up to and including December 16, 2011
· Transcom has agreed on a refinancing of its credit facility
· The equity issue and the bank refinancing will strengthen the
capital base of the company and give the company increased financial and
operational flexibility in the execution of the transformation plan the
company is currently engaged in
Background and Reasons
During the past two years, Transcom has been implementing a
transformation program with the objective of accelerating sales growth,
improving underperforming areas and changing the company technology and
portfolio footprint. Despite the progress achieved in developing sales
opportunities, the evolution of Transcom's revenues during the first
half of 2011 as well as the market dynamics required that the company
revisited its delivery infrastructure.
Based on this development, Transcom in June 2011 decided to launch a
restructuring and rightsizing plan aimed at adjusting its delivery
capacity to the current book of business, strengthening global
competitiveness and increasing operational efficiency. The total costs
for the plan amounts to EUR 32.8 million and is expected to result in
annualised savings of approximately EUR 10 - 12 million when fully
implemented. The implementation of the program is proceeding according
to plan.
The costs associated with the restructuring plan together with the
underlying negative results during the second quarter of 2011 have led
to an increase in the company's debt position. At the end of the third
quarter 2011, net debt to EBITDA amounted to 4.2 on a rolling 12 month
basis compared to 2.5 at the beginning of the year. The existing
Revolving Credit Facility matures in April 2012 and is therefore
recorded as short term debt (see further “Refinancing of Credit
Facility” below).
In the light of the restructuring program and the upcoming refinancing
of the credit facility, the Board of Directors of Transcom has conducted
a review of the financing structure of the company. Based on this
review, the Board of Directors of Transcom has concluded that a
strengthened equity capital base will give the company a desired
increased financial and operational flexibility.
The Board of Directors of Transcom has therefore resolved, subject to
approval by an extraordinary general meeting, to undertake a rights
issue of new shares of approximately SEK 500 million with preferential
rights for the company's
shareholders[1] (file:///H:/Transcom/Press%20releases/Project%20Marx/FIN
AL%20RELEASE/Marx%20announcement%20release%20FINAL,%20Transcom%20logo.do
c#_ftn1).
The Board of Directors of Transcom has also resolved, as a consequence
of the rights issue, to propose to the extraordinary general meeting, to
reduce the nominal value per share of Transcom from EUR 0.43 to EUR
0.043 and to pass certain other resolutions in order to implement the
rights issue, including making certain other amendments to the articles
of association, amongst other to offset the impact of the reduction of
the nominal value on the preferred dividend right for class B shares.
Refinancing of Credit Facility
Transcom has agreed with its lenders (DnB NOR Bank ASA, Norge, Filial
Sverige, Skandinaviska Enskilda Banken AB (publ) and Svenska
Handelsbanken AB (publ)) on a refinancing of the current credit
facility, which would have matured in April 2012. The new facility of
EUR 125 million is partly amortising and has a time to maturity of 3
years. The facility includes covenants such as restrictions on leverage
and minimum interest coverage, and imply further reductions in the
company's leverage. The new facility is subject to completion of the
rights issue.
Terms of the rights issue
In accordance with the laws of Luxembourg, where Transcom has its
registered seat, holders of class A shares and holders of class B-shares
in Transcom will have preferential rights to subscribe for new shares of
both class A and B in proportion to their existing holdings,
irrespectively of whether such existing holdings consist of class A or
class B shares. Subscriptions may also be submitted without preferential
rights.
The record date at the Swedish Central Securities Depository, Euroclear
Sweden AB, for participation in the rights issue is November 24. The
subscription period is expected to run as from November 29 up to and
including December 16 or such later date as decided by the Board of
Directors of Transcom.
The increase of the share capital, the number of shares to be issued,
and the subscription price for the new shares, will be determined by the
Board of Directors of Transcom and will be announced on or about
November 17.
Several of the largest shareholders in Transcom, including among others
Investment AB Kinnevik (“Kinnevik”), Investment AB Öresund and the
Fourth Swedish National Pension Fund, together representing
approximately 38 percent of the capital and 64 percent of the votes,
support the rights issue and have made commitments to subscribe for
their respective pro rata shares in the rights issue, corresponding to
approximately 38 percent of the rights issue.
The largest shareholder of Transcom, Kinnevik, has committed to fully
guarantee the remainder of the rights issue, and subscribe for any
shares not taken up by the shareholders having preferential rights or by
persons without preferential rights. This guarantee by Kinnevik is
conditional upon there being no circumstances occurring before the end
of the subscription period that may have a material adverse effect upon
Transcom's sales, profit, liquidity or assets, and further that
Transcom, as of the date hereof, has made public all information which
should have been made public.
The rights issue is subject to approval by an Extraordinary General
Meeting to be held at 15:00 CET on November 21 in Luxembourg. The notice
of the Extraordinary General Meeting will be announced through a
separate press release today and published in the Luxembourg official
gazette as well as in a Luxembourg newspaper, the Tageblatt, by the
latest on October 21. The convening notice is as from today available at
the Company's website, www.transcom.com (http://www.transcom.com/).
Proforma financial effects
The table below illustrates the company's balance sheet as of September
30, 2011 and the pro forma effects of the proposed rights issue. The
table assumes an issue size of SEK 500 million and an exchange rate of
EUR/SEK 9.14. The pro forma balance sheet does not take transaction
costs into account.
Group Balance Sheet Rights
Pro forma
€ million 30 Sep, 2011 Issue 30
Sep, 2011
Assets
Non current assets 189.8
189.8
Current assets excl. cash and cash equivalents 147.3
147.3
Cash and cash equivalents 37.8 54.7
92.5
Total assets 374.9 54.7
429.6
Equity and Liabilities
Total equity 124.1 54.7
178.8
Interest bearing liabilities 111.2
111.2
Other, non-interest bearing liabilities 139.6
139.6
Total equity and liabilities 374.9 54.7
429.6
Net debt 73.4 (54.7)
18.7
Indicative timetable for the rights issue
17 November Subscription price and terms are
decided and announced through a press release.
21 November Extraordinary General Meeting
approves the rights issue resolved by the Board of Directors.
22 November First day of trading in the
shares, excluding right to participate in the rights issue.
24 November Record date for participation in
the rights issue, i.e. holders registered in the share register of
Transcom or the SDR register kept by Euroclear Sweden AB as of this day
will receive subscription rights for participation in the rights issue.
25 November Estimated date
of publication of the prospectus.
29 Nov - 13 Dec Trading in
subscription rights.
29 Nov - 16 Dec Subscription
period.
Financial and legal advisors
SEB Enskilda is acting as financial advisor to Transcom and Cederquist
and NautaDutilh are acting as legal advisors to Transcom in the rights
issue.
Telephone conference
Transcom will host a conference call at 11:00 CET on October 19. The
conference call will be held in English and will also be available as
webcast on Transcom website, www.transcom.com (http://www.marx.com/).
Dial-in information:
To ensure that you are connected to the conference call, please dial in
a few minutes before the start in order to register your attendance.
Sweden: 08-503 364 34
UK: +44 (0) 1452 555 566
Passcode: 95756596
For further information please contact:
Pablo Sánchez-Lozano, President and CEO +352 27 755 000
Aïssa Azzouzi, CFO +352 27 755 013
Stefan Pettersson, Head of Investor Relations +46 70 776 80 88,
stefan.pettersson@transcom.com (stefan.pettersson@transcom.com)
IMPORTANT NOTICE
This press release is not an offer for subscription for shares or SDRs
in Transcom. A prospectus relating to the rights issue referred to in
this press release and the subsequent listing of the SDRs at NASDAQ OMX
Stockholm will be prepared and filed with the Swedish Financial
Supervisory Authority. After approval and registration of the prospectus
by the Swedish Financial Supervisory Authority, the prospectus will be
published and made available on inter alia Transcom's website, subject
to certain customary limitations arising from securities laws and
regulations.
The distribution of this press release in certain jurisdictions may be
restricted by law and persons into whose possession it or any part of it
comes should inform themselves about and observe any such restrictions.
The information in this press release shall not constitute an offer to
sell or the solicitation of an offer to buy, nor shall there be any sale
of the securities referred to herein in any jurisdiction in which such
offer, solicitation or sale would require preparation of further
prospectuses or other offer documentation, or be unlawful prior to
registration, exemption from registration or qualification under the
securities laws of any such jurisdiction.
This press release does not constitute or form part of an offer or
solicitation of an offer to purchase or subscribe for securities in the
United States. The securities referred to herein have not been and will
not be registered under the U.S. Securities Act of 1933, as amended (the
“Securities Act”), and may not be offered or sold in the United States
absent registration under the Securities Act or an exemption therefrom.
No public offering of the securities referred to herein is being made in
the United States. Copies of this announcement are not being, and may
not be, distributed or sent, in whole or in part, directly or
indirectly, into the United States, Australia, Canada, Hong Kong or
Japan.
SEB Enskilda is acting for the company and no one else in connection
with the rights issue and will not be responsible to anyone other than
the company for providing the protections afforded to their respective
clients or for providing advice in relation to the rights issue and/or
any other matter referred to in this announcement.
SEB Enskilda accepts no responsibility whatsoever and makes no
representation or warranty, express or implied, for the contents of this
announcement, including its accuracy, completeness or verification or
for any other statement made or purported to be made by it, or on its
behalf, in connection with the company and the new shares or SDRs, or
the rights issue, and nothing in this announcement is, or shall be
relied upon as, a promise or representation in this respect, whether as
to the past or future. SEB Enskilda accordingly disclaims to the fullest
extent permitted by law all and any responsibility and liability whether
arising in tort, contract or otherwise which they might otherwise have
in respect of this announcement or any such statement.
This press release has not been approved by any regulatory authority.
This press release is not a prospectus and investors should not
subscribe for or purchase any securities referred to in this press
release except on the basis of information provided in the prospectus to
be published by Transcom on its website in due course.
European Economic Area
Transcom has not authorized any offer to the public of SDRs, shares or
rights, as applicable, in any Member State of the European Economic Area
other than Sweden. With respect to each Member State of the European
Economic Area other than Sweden and which has implemented the Prospectus
Directive (each, a “Relevant Member State”), no action has been
undertaken to date to make an offer to the public of SDRs, shares or
rights requiring a publication of a prospectus in any Relevant Member
State. As a result, the SDRs, shares or rights, as applicable, may only
be offered in Relevant Member States:
(a) to legal entities which are authorized or regulated to operate in
the financial markets or, if not so authorized or regulated, whose
corporate purpose is solely to invest in securities;
(b) to any legal entity meeting two or more of the following criteria:
(1) an average of at least 250 employees during the last financial year;
(2) a total balance sheet of more than EUR 43 million and (3) an annual
net turnover of more than EUR 50 million, as shown in its last annual or
consolidated accounts; or
(c) in any other circumstances, not requiring the company to publish a
prospectus as provide under Article 3(2) of the Prospectus Directive.
For the purposes hereof, the expression an “offer to the public of SDRs,
shares or rights, as applicable” in any Relevant Member State means the
communication in any form and by any means of sufficient information on
the terms of the offer and the SDRs, shares or rights, as applicable, to
be offered so as to enable an investor to decide to purchase any
securities, as the same may be varied in that Member State by any
measure implementing the Prospectus Directive in that Member State and
the expression “Prospectus Directive” means Directive 2003/71/EC and
includes any relevant implementing measure in each Relevant Member
State.
Grand Duchy of Luxembourg
This press release shall not be and shall not be considered as an
''offer of securities to the public'' for purposes of the Luxembourg law
on prospectuses for securities dated 10 July 2005.
United Kingdom
This communication is directed only at (i) persons who are outside the
United Kingdom and (ii) persons who have professional experience in
matters relating to investments falling within Article 19(5) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order 2005
(the “Order”) and (iii) to high net worth entities falling within
Article 49(2) (a) to (d) of the Order (all such persons together being
referred to as “relevant persons”). Any investment activity to which
this communication relates will only be available to and will only be
engaged with, relevant persons. Any person who is not a relevant person
should not act or rely on this document or any of its contents.
Forward-Looking Statements
This press release contains forward-looking statements that reflect
management's current views with respect to certain future events and
potential financial performance. Although Transcom believes that the
expectations reflected in such forward-looking statements are
reasonable, no assurance can be given that such expectations will prove
to have been correct. Accordingly, results could differ materially from
those set out in the forward-looking statements as a result of various
factors. You are advised to read this announcement and, once available
the prospectus and the information incorporated by reference therein, in
their entirety for a further discussion of the factors that could affect
the Transcom's future performance and the industries in which it
operates. In light of these risks, uncertainties and assumptions, the
events described in the forward-looking statements in this announcement
may not occur.
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Transcom's shares of class A and class B are listed in the form of
Swedish Depository Receipts ("SDRs") on Nasdaq OMX Stockholm. Holders of
the SDRs will have preferential rights to the new shares that will be
represented by SDRs.
TRANSCOM ANNOUNCES FULLY UNDERWRITTEN RIGHTS ISSUE OF SEK 500 MILLION
| Source: Transcom WorldWide S.A.
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