Hexagon Composites announces proposed private placement of new shares and strategic cooperation agreement with Mitsui & Co., Ltd.
29.02.2016 Stock Exchange Release
Hexagon Composites ASA ("Hexagon Composites" or the "Company") and Mitsui & Co., Ltd. ("Mitsui") have on 27 February 2016 entered into an investment agreement (the "Investment Agreement") pursuant to which Mitsui on certain terms and conditions undertakes to subscribe for 33,333,000 new ordinary shares (the "New Shares") of the Company at a price of NOK 20.00 per new share (the "Subscription Price"). The Subscription Price represents a premium of 3.0% over the volume weighted average share price for the three month period ended on 26 February 2016, and a premium of 2.6% over the closing price of the shares on 26 February 2016.
At the same date, Hexagon Composites and Mitsui have entered into a five year strategic co-operation agreement (the "Alliance Agreement"), pursuant to which the parties, for as long as Mitsui remains a substantial shareholder in the Company, among other things, agree to use their reasonable efforts to discuss and promote the Company's market and commercial opportunities and development in the best interests of the Company.
Concurrently with Hexagon Composites and Mitsui entering into the Investment Agreement and the Alliance Agreement, Mitsui has separately entered into a share purchase agreement (the "SPA") with Flakk Investment AS (a company controlled by Knut Flakk, "Flakk Investment"), pursuant to which Mitsui shall purchase 8,333,321 Hexagon Composites shares from Flakk Investment at a price of NOK 20.00 per share. Immediately after, and subject to, completion of the Investment Agreement and the SPA, Flakk Investment will hold 34,282,667 shares in the Company (corresponding to 20.57% of the outstanding shares of the Company after the issuance of the New Shares), and the total holding of Knut Flakk and his close associates will be 36,095,717 shares (corresponding to 21.66% of the outstanding shares of the Company after the issuance of the New Shares). Immediately after, and subject to, completion of the Investment Agreement and the SPA, Mitsui will hold 41,666,321 shares (corresponding to 25.01% of the outstanding shares of the Company after the issuance of the New Shares).
Completion of the Investment Agreement is subject to, inter alia, approval by the extraordinary general meeting of the Company (the "EGM") to issue the New Shares, and the preparation and approval of a listing prospectus for the New Shares. The EGM, where it will be proposed to deviate from the shareholders' pre-emptive rights, and thereby issue the New Shares to Mitsui, is expected to be held on or around 21 March 2016. The board of directors of the Company considers that the approval of the transaction is in the Company's best interests, due to, inter alia, the strategic opportunities inherent in a co-operation with Mitsui and to the price at which the New Shares are proposed to be issued. Completion of the Investment Agreement is further conditional upon the information provided to Mitsui in advance of the agreements being complete, and the absence of any material adverse change in the financial conditions, business or results of operations of the Hexagon Composites group as a whole prior to completion. In addition, completion of the Investment Agreement is subject to completion of the SPA, and the completion of the SPA is subject to completion of the Investment Agreement. Due to the conditions set out in the Investment Agreement and SPA, there can be no guarantee that the transactions described above will be completed.
«We are very pleased indeed to have Mitsui as a strategic partner and large investor. Hexagon Composites has had commercial relations with Mitsui for decades, and we fully appreciate the professionalism and integrity that characterize their way of operating. As a major global corporation, Mitsui will strongly support Hexagon Composites' strategic development of new markets and segments. With its Japanese base, Mitsui has deep experience pertaining to carbon fiber related industries. Japan has taken the lead in developing the Hydrogen society, and we look forward to drawing on Mitsui's capabilities in executing our Hydrogen strategy. With the capital to be contributed by Mitsui, we will significantly strengthen our balance sheet and thus our capacity to pursue organic as well as non-organic growth initiatives.», says Jon Erik Engeset, President & CEO of Hexagon Composites.
"We, Mitsui, believe that the collaboration between Mitsui and Hexagon Composites will meaningfully contribute towards creating additional value for Hexagon Composites by enhancing the development of their existing and new businesses. Furthermore, the collaboration will contribute towards the development of two of Mitsui's seven Key Strategic Domains, which were publicly announced in our New Medium-term Management Plan. This deal is uniquely positioned across Mitsui's "Mineral Resources" and "Mobility" domains and it will help to develop and solidify these domains by increasing inter-domain collaboration to generate synergies. Leveraging the opportunity with Hexagon Composites and its lightweight products, we will pursue innovative solutions to reduce CO2 emission. We plan to enhance the development of Hexagon Composites' hydrogen strategy, aiming to pave our way to hydrogen societies near future" says Isao Kuroda, General Manager of Performance Materials Division in Mitsui.
"As the main shareholder of Hexagon Composites ASA, the Flakk Group is very pleased to welcome Mitsui as a new strategic investor. We are convinced that Mitsui, with its comprehensive industrial background and global reach, will contribute strongly to the future success of Hexagon Composites. The Flakk Group will continue as a substantial, long term investor in Hexagon Composites and we are looking forward to continuing to support the further development of the company", says Knut Flakk, Chairman of Hexagon Composites and CEO of Flakk Group.
DNB Markets, a part of DNB Bank ASA, acts as financial advisors to Hexagon Composites in connection with transactions referred to above. Advokatfirmaet Schjødt acts as legal advisors to Hexagon Composites.
About HEXAGON COMPOSITES ASA
Hexagon Composites ASA is a publicly listed company with its headquarters in Aalesund, Norway. The Hexagon Composites group develops and produces composite cylinders for the storage and transport of various gases under pressure.
About MITSUI & CO., LTD.
Mitsui is one of the most diversified and comprehensive trading, investment and service enterprises in the world, with 141 offices in 66 countries as of Feb, 2016. Utilizing our global operating locations, network and information resources, we are multilaterally pursuing business that ranges from product sales, worldwide logistics and financing, through to the development of major international infrastructure and other projects in the following fields: Iron & Steel Products, Mineral & Metal Resources, Infrastructure Projects, Integrated Transportation Systems, Chemicals, Energy, Food Resources, Food Products & Services, Consumer Services, IT & Communication, Corporate Development Business. Mitsui is actively taking on challenges for global business innovation around the world. For more information, visit http://www.mitsui.com
For more information:
Jon Erik Engeset
Chief Executive Officer
Phone: +47 916 30 550 | firstname.lastname@example.org
Chief Financial Officer
Telephone: +47 920 91 483 | email@example.com
Solveig D Saether
Phone: +47 906 34 977 | firstname.lastname@example.org
For more information about the company, please visit www.hexagon.no.
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