SRV’s Board of Directors decide on the terms and conditions of the EUR 50 million rights offering

SRV’s Board of Directors decide on the terms and conditions of the EUR 50 million rights offering

Not for publication, distribution or release, directly or indirectly, in or into the United States, Australia, Canada, Hong Kong, Japan, New Zealand, South Africa or Singapore

The Rights Offering in Brief

● Gross proceeds of approximately EUR 50 million to finance existing and potential future growth projects and to strengthen the balance sheet structure

● Two (2) new shares for three (3) existing share held on the record date of 20 August 2015

● Subscription price of EUR 2.11 per new share

● SRV shares will trade ex-rights from 19 August 2015

● Subscription period begins on 25 August 2015 and ends on 8 September 2015 at 20:00 Finnish time

● Trading in subscription rights begins on 25 August 2015 at 10:00 Finnish time and ends on 2 September 2015 at 18:30 Finnish time

General

Based on the authorization granted by the extraordinary general meeting of shareholders on 22 June 2015, the Board of Directors of SRV Group Plc (“SRV”) has resolved on the rights offering of EUR 50 million. The proceeds from the rights offering will be used to finance existing and potential future growth projects and to strengthen the balance sheet structure. The reason for the Offering is SRV’s increased construction volumes and in particular the large projects that require equity and financing, such as Kalasatama REDI and several other growth projects in Finland and Russia that are significant for the future.

A total of 23,731,107 new shares (the “Offer Shares”) will be offered for subscription with pre-emptive rights for existing shareholders (the “Offering”). SRV’s shareholders who are registered in the SRV’s shareholder register maintained by Euroclear Finland Ltd on the record date of the Offering on 20 August 2015 (the “Record Date”), will receive one (1) freely transferable subscription right (the “Subscription Right”) in the form of a book-entry for each existing share of SRV held on the Record Date. Three (3) Subscription Rights will entitle its holder to subscribe for two (2) Offer Shares at a subscription price of EUR 2.11 per Offer Share (the “Subscription Price”). The Subscription Price corresponds to an implied discount to the theoretical ex-rights price of approximately 29.8 percent, based on SRV’s closing share price of EUR 3.60 on 17 August 2015.

Shares will trade ex-rights from 19 August 2015. The subscription period commences on 25 August 2015 and expires on 8 September 2015 at 20:00 Finnish time. Public trading of the Subscription Rights on the Helsinki Stock Exchange commences on 25 August 2015 at 10:00 Finnish time and expires on 2 September 2015 at 18:30 Finnish time.

The Offer Shares will represent approximately 39.2 percent of all shares of SRV and votes attached to such shares after the completion of the Offering assuming that the Offering is subscribed for in full.

Existing shareholders of SRV and other investors who have subscribed for Offer Shares with Subscription Rights may subscribe for Offer Shares also without Subscription Rights (the “Secondary Subscription”). Offer Shares will be allocated to subscribers in the Secondary Subscription in the event that not all the Offer Shares have been subscribed for pursuant to the exercise of Subscription Rights. The allocation of Offer Shares in the Secondary Subscription will be primarily determined per book-entry account in proportion to the number of Subscription Rights exercised for subscription of Offer Shares.

SRV expects to publish the preliminary results of the Offering in a stock exchange release on or about 10 September 2015 and the final results of the Offering on or about 14 September 2015.

The terms and conditions of the Offering are attached to this stock exchange release.

Nordea Bank Finland Plc (“Nordea”) and Pohjola Bank Plc (“Pohjola”) act as the managers for the Offering.

Use of Proceeds

The gross proceeds received by SRV from the Offering will be approximately EUR 50 million.

The proceeds from the Offering will be used to finance existing and potential future growth projects and to strengthen the balance sheet structure. The reason for the Offering is SRV’s increased construction volumes and in particular the large projects that require equity and financing, such as Kalasatama REDI and several other growth projects in Finland and Russia that are significant for the future. The proceeds from the Offering will be used to strengthen the balance sheet structure as well as to secure the additional debt financing required for the financing of different construction projects. After the completion of the Offering, SRV plans to obtain the required additional debt financing through a domestic or foreign bond transaction. In addition, SRV may obtain debt financing through equivalent financing measures.

Subscription Commitments

Ilpo Kokkila, Kolpi Investments Oy ja Timo Kokkila (together, the “Subscription Guarantors”), whose holdings in SRV represent an aggregate of 51.8 percent of SRV’s existing shares, have, subject to certain conditions, each separately and irrevocably undertaken to subscribe and pay for, at the Subscription Price, such number of Offer Shares that corresponds to the respective Subscription Guarantor’s pro rata allocation in the Offering on the basis of the Subscription Rights to be allocated to it (either personally and/or through a controlled entity). The subscription commitments include in total of 12,709,585 Offer Shares, or 53.6 percent of the Offer Shares in total.

Publication of the Offering Circular

In relation to the Offering, SRV has submitted a Finnish language offering circular for the approval of the Finnish Financial Supervisory Authority, and such offering circular is expected to be published on 20 August 2015. The Finnish language offering circular is expected to be available on SRV’s website www.srv.fi/sijoittajat on or about 21 August 2015 and expected to be available at the branch offices of Nordea and OP Financial Group’s offices and at Helsinki Stock Exchange on 24 August 2015.

Further information:
Juha Pekka Ojala, President and CEO, tel: +358 (0)40 733 4173
Ilkka Pitkänen, CFO, tel. +358 (0)40 667 0906
Päivi Kauhanen, Vice President, Communications, tel. +358 (0)50 598 9560

www.srv.fi

DISCLAIMER

This announcement is not being made in and copies of it may not be distributed or sent into the United States, Australia, Canada, Hong Kong, Japan, New Zealand, South Africa or Singapore. This announcement does not constitute an offer to sell, or a solicitation of an offer to purchase, any securities in the United States. The securities referred to herein may not be sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. SRV Group Plc does not intend to register any of the securities in the United States or to conduct a public offering of the securities in the United States.

This communication does not constitute an offer of the securities to the public in the United Kingdom. No prospectus has been or will be approved in the United Kingdom in respect of the securities. This communication is being distributed to and is directed only at (i) persons who are outside the United Kingdom or (ii) persons who are investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) and (iii) high net worth entities, and other persons to whom it may lawfully be communicated, 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.

TERMS AND CONDITIONS OF THE OFFERING

Background

On 22 June 2015, the Extraordinary General Meeting of SRV Group Plc (the “Company”) authorised the Company’s Board of Directors to decide on the issuance of a maximum of 27,000,000 new shares.

On 18 August 2015, the Board of Directors of the Company resolved, based on the above authorisation granted by the Extraordinary General Meeting, to issue a maximum of 23,731,107 new shares through a share issue based on the pre-emptive subscription right of shareholders of the Company (the “Offering”) as set forth in the below terms and conditions of the Offering.

The new shares to be issued in the Offering (the “Offer Shares”) represent approximately 64.5 percent of the total 36,768,468 shares and votes attached to such shares in the Company before the Offering and approximately 39.2 percent of the total 60,499,575 shares and votes attached to such shares in the Company after the Offering assuming that the Offering is subscribed for in full.

Nordea Bank Finland Plc (“Nordea”) and Pohjola Bank plc (“Pohjola Bank”) are acting as global coordinators and bookrunners in the Offering (together, the “Managers”).

Terms and Conditions of the Offering

Right to Subscribe

Primary Subscription Right

The Offer Shares to be issued (the “Offer Shares”) will be offered for subscription by the shareholders of the Company in proportion to their shareholdings of the existing shares.

A shareholder who is registered in the Company’s shareholder register maintained by Euroclear Finland Ltd on the record date of 20 August 2015 of the Offering (“Record Date”) will automatically receive one (1) freely transferable subscription right (the “Subscription Right”) as a book-entry (ISIN Code FI4000167291) for every share owned on the Record Date (the “Primary Subscription Right”).

A shareholder, or a person or an entity to whom Subscription Rights have been transferred, is entitled to subscribe for two (2) Offer Shares for every three (3) Subscription Rights. Fractions of Offer Shares will not be allotted, i.e., exactly three (3) Subscription Rights are needed for subscribing for every two (2) Offer Shares. Shares held by the Company do not entitle to Subscription Rights.

Secondary Subscription

Further, a shareholder (or other investor) who has subscribed for Offer Shares based on the Primary Subscription Right, is entitled to subscribe for Offer Shares not subscribed for by virtue of the Primary Subscription Right (the “Secondary Subscription”).

Subscription Commitments

The largest shareholders of the Company Ilpo Kokkila, Kolpi Investments Oy and Timo Kokkila have each individually and irrevocably committed to subscribe for Offer Shares to be issued in the Offering fully in proportion to their current shareholdings in the Company. Ilpo Kokkila, Kolpi Investments Oy and Timo Kokkila will subscribe for a total of 12,709,585 Offer Shares in the Offering pursuant to their respective subscription commitments as follows: Ilpo Kokkila (either personally and/or through a controlled entity) 6,023,141 Offer Shares, Kolpi Investments Oy 3,671,586 Offer Shares and Timo Kokkila 3,014,858 Offer Shares. In total, these subscription commitments represent approximately 53.6 percent of the maximum number of Offer Shares to be issued in the Offering.

Subscription Price

The subscription price is EUR 2.11 per Offer Share (the “Subscription Price”). The Subscription Price will be recorded in its entirety in the invested free equity fund.

The Subscription Price includes a discount customary in rights issues compared to the closing price of the share on NASDAQ OMX Helsinki Ltd (“Helsinki Stock Exchange”) on the trading day immediately preceding the decision on the Offering.

Subscription Period

The subscription period will commence on 25 August 2015 and expire on 8 September 2015 at 8 p.m. Finnish time (the “Subscription Period”). The places of subscription will accept subscription assignments during their normal business hours.

Account operators may impose a deadline for subscription that is earlier than the expiry of the Subscription Period.

Subscription for Offer Shares pursuant to the Primary Subscription Right and Payments

A holder of Subscription Rights may participate in the Offering by subscribing for Offer Shares pursuant to the Subscription Rights registered on his or her book-entry account and by paying the Subscription Price. Each three (3) Subscription Rights entitle their holder to subscribe for two (2) Offer Shares. Fractional Offer Shares cannot be subscribed for. In order to participate in the Offering, a holder of Subscription Rights must submit a subscription assignment in accordance with the instructions given by Nordea or the relevant custodian or account operator. A holder of Subscription Rights, who does not receive instructions for subscription from his or her account operator, can contact Nordea.

If a share entitling to a Subscription Right is pledged or subject to any other restrictions, the Subscription Right may not necessarily be exercised without the written consent of the pledgee or holder of any other relevant right.

Subscription orders can be submitted in the following subscription places:

● at the branch offices of Nordea Bank Finland Plc and Nordea Private Banking units during their normal business hours;

● via Nordea Customer Service by telephone with bank identifier codes from Monday to Friday from 8:00 a.m. to 8:00 p.m. Finnish time at +358 200 3000 (in Finnish, local network charge/mobile phone charge apply), at +358 200 5000 (in Swedish,  local network charge/mobile phone charge apply), or from Monday to Friday from 10:00 a.m. to 4:30 p.m. Finnish time at +358 200 70000 (in English, local network charge/mobile phone charge apply). Customers subscribing through the call service need a personal network service agreement with Nordea Bank Finland Plc. When subscribing through the call service, the identification of the shareholder will be confirmed by network identification codes. Corporations cannot give subscription assignments by telephone through Nordea Customer Service. The Nordea Customer Service calls are recorded. Subscriptions cannot be effected through the Nordea net bank service; and

● with account operators and custodians who have an authorized representative agreement with Nordea Bank Finland Plc regarding receipt of subscriptions.

The Subscription Price of the Offer Shares subscribed for in the Offering shall be paid in full at the time of submitting the subscription assignment in accordance with the instructions given by the subscription place or the relevant custodian or account operator.

Shareholders and other investors participating in the Offering whose shares or Subscription Rights are held through a nominee must submit their subscription assignments in accordance with the instructions given by their custodial nominee account holder.

Incomplete or erroneous subscription assignments may be rejected. A subscription assignment may be rejected if the subscription payment is not made according to these terms and conditions or if such payment is not made in full. In these situations, the subscription payment will be refunded to the subscriber. No interest will be paid on the refunded amount.

Any exercise of the Primary Subscription Right is irrevocable and may not be modified or cancelled otherwise than as stated in section “Cancellation of Subscriptions under Certain Circumstances” in these terms and conditions.

Unexercised Subscription Rights will expire without any compensation at the expiry of the Subscription Period on 8 September 2015.

Subscription of Offer Shares pursuant to the Secondary Subscription and Payments

A shareholder (or other investor) who has subscribed for Offer Shares based on the Primary Subscription Right (the “Subscriber”) is entitled to subscribe for Offer Shares in the Secondary Subscription.

The subscription of the Offer Shares pursuant to the Secondary Subscription will take place by submitting a subscription assignment and at the same time paying the Subscription Price in accordance with the instructions given by the subscription place, the relevant custodian or account operator or, in the case of nominee registered investors, by the nominee.

Incomplete or erroneous subscription assignments may be rejected. A subscription assignment may be rejected if the subscription payment is not made according to these terms and conditions or if such payment is not made in full. In these situations, the subscription payment will be refunded to the Subscriber. No interest will be paid on the refunded amount.

Any subscriptions made in the Secondary Subscription are irrevocable and may not be modified or cancelled otherwise than as stated in section “Cancellation of Subscriptions under Certain Circumstances” in these terms and conditions.

On or about 16 September 2015, account operators will confirm the acceptance or rejection of the subscriptions of Offer Shares made in a Secondary Subscription to the Subscribers.

Cancellation of Subscriptions under Certain Circumstances

If the offering circular for the Offering (the “Offering Circular”) is supplemented or corrected due to a mistake or inaccuracy or material new information which could be of material relevance to the investors, any Subscribers who have already subscribed for Offer Shares before the related supplement is published, shall have the right to withdraw their subscription in accordance with the Finnish Securities Market Act (746/2012, as amended). The Subscribers have a right to withdraw their subscription within two (2) banking days after the supplement has been published. The cancellation right requires that the mistake, inaccuracy or material new information has emerged before the trading in the interim shares representing the Offer Shares has begun or, in case of Secondary Subscription, before the Offer Shares have been delivered to the Subscribers. The withdrawal of a subscription applies to the subscription to be withdrawn as a whole. The right to withdraw and the procedure for such withdrawal right will be announced together with any such possible supplement to the Offering Circular through a stock exchange release. If the holder of a Subscription Right has sold or otherwise transferred the Subscription Right, such sale or transfer cannot be cancelled.

Public Trading of the Subscription Rights

The holders of Subscription Rights may sell their Subscription Rights any time before the public trading in Subscription Rights ends. The Subscription Rights are subject to public trading on the Helsinki Stock Exchange between 25 August 2015 at 10:00 a.m. Finnish time and 2 September 2015 at 6:30 p.m. Finnish time. Subscription Rights may be sold or purchased by giving a sell or purchase assignment to one’s own book-entry account operator or to any securities broker.

Approval of the Subscriptions

The Board of Directors of the Company will approve all subscriptions pursuant to the Primary Subscription Right made in accordance with these terms and conditions of the Offering and applicable laws and regulations.

If all Offer Shares to be issued in the Offering have not been subscribed for by virtue of the Primary Subscription Right, the Board of Directors of the Company will resolve to allocate such unsubscribed Offer Shares among the Subscribers having made a Secondary Subscription. In case of over-subscription by virtue of Secondary Subscription, the allocation among Subscribers will be determined per book-entry account in proportion to the number of Subscription Rights exercised by Subscribers in accordance with the Primary Subscription Right and, where this is not possible, by drawing of lots. If several subscription assignments are given concerning such a book-entry account, these subscription assignments are combined as one subscription assignment concerning such a book-entry account. Should the Subscriber not receive all Offer Shares subscribed for by virtue of the Secondary Subscription, the subscription price for the Offer Shares not received by the Subscriber will be repaid to the Subscriber at the latest on or about 17 September 2015. No interest will be paid for the repayable funds.

If all Offer Shares have not been subscribed for after the Secondary Subscription, the Board of Directors of the Company may decide on the offering of the unsubscribed Offer Shares to parties decided by it. The subscription period for these parties will expire on 14 September 2015.The Company’s Board of Directors will decide on the approval of the subscriptions on or about 14 September 2015. The Company will publish the final results of the Offering in a stock exchange release on or about 14 September 2015.

Registration of the Offer Shares to the Book-entry Accounts and Trading in the Offer Shares

The Offer Shares subscribed for in the Offering by virtue of the Primary Subscription Right will be recorded on the Subscriber’s book-entry account after the registration of the subscription as interim shares (ISIN Code FI4000167309) corresponding to the Offer Shares. The interim shares will become subject to public trading on or about 9 September 2015. The interim shares are combined with the existing shares of the Company (ISIN Code FI0009015309) on or about 14 September 2015. The Offer Shares subscribed for and approved by virtue of the Secondary Subscription will be recorded on the Subscribers’ book-entry accounts after the registration of Offer Shares in the Trade Register, on or about 15 September 2015.

Trading in the Offer Shares commences on the official list of the Helsinki Stock Exchange on or about 15 September 2015.

Shareholder Rights

The Offer Shares will entitle their holders to full dividend and other distribution of funds declared by the Company, if any, and to other shareholder rights in the Company after the Offer Shares have been registered in the Trade Register and in the Company’s shareholder register, on or about 15 September 2015.

Fees and Expenses

No transfer tax or service charges are payable for the subscription of the Offer Shares. Custodians, account operators and brokers may charge a commission for trading in the Subscription Rights in accordance with their own price lists. Each custodian and account operator will charge fees in accordance with its own price list for maintaining the book-entry account and for the custody of the shares.

Information

Documents mentioned in Chapter 5, Section 21 of the Finnish Companies Act are available for review as of the commencement of the Subscription Period at the Company’s website at www.srv.fi/sijoittajat.

Applicable Law and Dispute Resolution

The Offering and the Offer Shares shall be governed by the laws of Finland. Any disputes arising in connection with the Offering shall be settled by the court of jurisdiction in Finland.

In case of any discrepancies between the original Finnish language version and the English language translation of these terms and conditions, the Finnish language version shall prevail.

Other Issues

Other issues and practical matters relating to Offering will be resolved by the Board of Directors of the Company.

 

Share page