Freemelt has carried out a directed share issue of SEK 66 million, partly subject to resolution by an extraordinary general meeting
21 Feb 2023 | Regulatory
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Freemelt Holding AB (publ) (”Freemelt” or the ”Company”) has successfully completed a directed share issue of 11 million new ordinary shares, raising gross proceeds of SEK 66 million (the “Directed Share Issue”). The subscription price in the Directed Share Issue was set at SEK 6 per share and was determined through an accelerated book-building procedure carried out by ABG Sundal Collier. 845,000 of the new ordinary shares in the Directed Share Issue is subject to resolution by the extraordinary general meeting, which is expected to be held 13 March 2023. The Company will shortly publish a separate notice to the extraordinary general meeting.
The Directed Share Issue
Freemelt has carried out a directed share issue of 11 million new ordinary shares, partly subject to resolution by an extraordinary general meeting, at a subscription price of SEK 6 per share, consequently raising gross proceeds of SEK 66 million before deduction of transaction costs. The Directed Share Issue is made in two tranches. The Board of Directors of the Company has resolved on the first tranche of 10,155,000 shares, corresponding to approximately SEK 61 million, based on the authorisation granted by the annual general meeting held 24 May 2022 (“Tranche 1”). In accordance with the proposal by the Company's shareholder Carlbergssjön AB, the Board of Directors has as a part of the Directed Share Issue summoned the shareholders to an extraordinary general meeting to resolve on the second tranche of 845,000 shares, corresponding to approximately SEK 5 million (“Tranche 2”). The Company will shortly publish a separate notice to the extraordinary general meeting that is expected to be held 13 March 2023.
The subscription price has been determined through an accelerated book-building procedure and corresponds to a discount of approximately 9.4 percent in relation to the 30 days' volume weighted average price (“VWAP”) on Nasdaq First North Growth Market. The Directed Share Issue was directed to selected Swedish and international investors and was subscribed for by, among others, Stiftelsen Industrifonden ("Industrifonden"), Coeli Circulus, Bengt Julander, Carlbergssjön AB and JEQ Capital AB. The subscriptions by Industrifonden, Coeli Circulus, Bengt Julander were conditional on that Per Anell, is elected as a new board member in the Company at the annual general meeting of the Company, which is expected to be held 25 May 2023. As announced in the Company’s press release earlier today, the Board of Directors of Freemelt is positive to Per Anell being elected as a new board member and that a nomination committee is established in the Company ahead of the Company's annual general meeting in 2023, in which election of board members up until the annual general meeting 2024 will be made. Furthermore, in accordance with the proposal by the Company's shareholder Carlbergssjön AB, the Board of Directors has resolved to summon the Company's shareholders to an extraordinary general meeting to resolve on Tranche 2 which in accordance with the proposal comprise a share issue, without preferential rights for the shareholders, directed to the Company's board members Carl Palmstierna, Staffan Zackrisson, Cecilia Jinert Johansson, Johannes Heinrich Schleifenbaum and Erik Lindeblad representing Lindeblad Ventures AB as well as the Company's CEO Daniel Gidlund. Subscription in Tranche 2 is subject to the resolution on Tranche 2 by the extraordinary general meeting that is expected to be held 13 March 2023.
Through the Directed Share Issue, the Company’s share capital will increase by SEK 550,000, from SEK 1,830,000 to SEK 2,380,000, by new issue of 11,000,000 ordinary shares, resulting in the total number of shares increasing from 36,600,000 shares to 47,600,000 shares. The Directed Share Issue results in a dilution of approximately 23.1 percent of the capital and votes for existing shareholders based on the total number of shares and votes in the Company after the Directed Share Issue.
Background and reasons
The net proceeds from the Directed Share Issue will be used to accelerate the development of the industrial machine eMELT, strengthening the sales and service organisation, working capital and investments to promote continued organic growth, including, inter alia, development resources and supply capacity.
The Company's Board of Directors has made an overall assessment and carefully considered the possibility to raise capital through a preferential rights issue, but considers that it, for example, would entail a risk that the Company cannot provide for its capital needs and at the same time maintain an optimal capital structure. The Board of Directors has concluded that a rights issue, compared to the Directed Share Issue, (i) would take significantly longer time to execute and thereby entail increased market risk exposure, (ii) would require significant underwriting commitments from an underwriting syndicate given the current market volatility, which would entail additional costs and/or additional dilution depending on the type of consideration paid for such underwriting commitments, (iii) likely would have had to be made at a lower subscription price given the discount levels in rights issues completed on the market in recent time, and (iv) unlike a rights issue, the Directed Share Issue is to some extent expected to broaden the shareholder base and provide the Company with new reputable institutional owners and strategic investors. Considering the above, the Board of Directors has made the assessment that a directed share issue with deviation from the shareholders’ preferential right is the most favourable alternative for Freemelt and in the best interest of the Company’s shareholders and thus considers that the reasons outweigh the main rule that new issues must be carried out with preferential rights for the shareholders.
As the subscription price in the Directed Share Issue has been determined through a book-building procedure, the Board of Directors assesses that the subscription price reflects current market conditions and demand.
Tranche 2 is resolved on by the extraordinary general meeting that is expected to be held 13 March 2023. Notice to the extraordinary general meeting will be published through a separate press release. The execution of Tranche 1 is not conditional upon Tranche 2 being carried out.
ABG Sundal Collier is acting as Sole Bookrunner in connection with the Directed Share Issue and Baker McKenzie is acting as legal advisor to Freemelt.
For more information, please contact:
Daniel Gidlund, CEO
+46 70 246 45 01
This information is such that Freemelt Holding AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation 596/2014. The information was submitted for publication, through the agency of the contact person set out above, on 21 February 2023 at 23.30 CET.
Freemelt is a high-tech company whose ground-breaking solution creates new opportunities for rapid growth in 3D printing, also known as additive manufacturing. The Company's protected technology enables cost-effective printing to a consistent and high quality. By choosing an open-source solution, the conditions are created for strong growth and expansion towards manufacturing markets. Freemelt was founded in 2017, is listed on Nasdaq First North Growth Market, has 34 employees, head office in Gothenburg and a manufacturing unit in Linköping. Read more at www.staging.freemelt.com.
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This announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the new shares. Any investment decision in connection with the Directed Share Issue must be made on the basis of all publicly available information relating to the Company and the Company’s shares. Such information has not been independently verified by ABG Sundal Collier. The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. ABG Sundal Collier is acting for the Company in connection with the transaction and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to its clients nor for giving advice in relation to the transaction or any other matter referred to herein.
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Information to distributors
Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended (“MiFID II”); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the “MiFID II Product Governance Requirements”), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the shares in The Company have been subject to a product approval process, which has determined that such shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the “EU Target Market Assessment”). Solely for the purposes of each manufacturer's product approval process in the United Kingdom, the target market assessment in respect of the shares in the Company has led to the conclusion that: (i) the target market for such shares is only eligible counterparties, as defined in the FCA Handbook Conduct of Business Sourcebook, and professional clients, as defined in Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 ("UK MiFIR"); and (ii) all channels for distribution of such shares to eligible counterparties and professional clients are appropriate (the “UK Target Market Assessment” and, together with the EU Target Market Assessment, the “Target Market Assessment”). Notwithstanding the Target Market Assessment, Distributors should note that: the price of the shares in the Company may decline and investors could lose all or part of their investment; the shares in the Company offer no guaranteed income and no capital protection; and an investment in the shares in the Company is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Directed Share Issue. Furthermore, it is noted that, notwithstanding the Target Market Assessment, ABG Sundal Collier will only procure investors who meet the criteria of professional clients and eligible counterparties.
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Latest update: 2023-02-21