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Asker, 19 October 2023. Argeo AS (“Argeo” or the “Company”) has engaged Pareto Securities AS Sole Global Coordinator and Bookrunner (the “Manager”) to advise on and effect a contemplated private placement of new shares (the “Offer Shares”) in the Company (the “Private Placement”), at a fixed price of NOK 3.20 per Offer Share (the “Offer Price”), to raise gross proceeds of NOK 250 million (the “Offering Size”).
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New strategic alliance with Shearwater
The contemplated Private Placement is partly carried out in conjunction with the new strategic alliance with Shearwater Geoservices Holding AS (“Shearwater”) to innovate and pioneer new technology and products across the subsea and marine seismic markets (the “Strategic Alliance”), as previously announced on 27 September 2023. The shared ambition is to jointly develop projects and clients specifically within carbon capture, marine minerals and offshore renewables (among others).
In connection with the Strategic Alliance, the Company will purchase the seismic vessel SW Bell (Ulstein SX124 X-BOW) from Shearwater for USD 12 million (the “Vessel Acquisition”). USD 6 million will be paid in cash (part of the use of proceeds in the Private Placement as described below) and the remaining purchase amount will be settled with 20,123,625 new shares in the Company (“Consideration Shares”). SW Bell will, subsequent to the Vessel Acquisition, be converted from a towed streamer seismic vessel to a full subsea Inspection, Maintenance and Repair (IMR) vessel.
As part of the Strategic Alliance, it will be proposed that the EGM (as defined below) approves the election of a Shearwater appointed representative at the Board.
Use of proceeds
The net proceeds to the Company from the Private Placement, together with an expected USD 10 million in new loan financing and USD 2 million credit facility, will be used to fund the (i) cash element of the Vessel Acquisition (USD 6 million), (ii) reactivation and upgrade CAPEX relating to the Vessel Acquisition (approx. NOK 139 million), (iii) upgrade CAPEX relating to the vessel Argeo Searcher (approx. NOK 11 million), (iv) down-payment on a leasing facility for 2 AUVs (USD 2 million), (v) various equipment CAPEX (approx. NOK 16 million), (vi) repayment of debt from Innovasjon Norge (up to NOK 23.5 million), as well as for (vii) working capital and general corporate purposes.
Pre-commitments
Kistefos AS, the largest shareholder in the Company with approx. 21% of the shares outstanding (adjusted for the Consideration Shares), has pre-committed to subscribe for, and will be allocated, NOK 52 million in the Private Placement.
Lock-ups
The Company, current members of the Company’s management and board of directors (the “Board”) , Kistefos AS and Shearwater, will enter into customary lock-up arrangements with the Manager that will restrict, subject to certain exceptions, their ability to issue, sell or dispose of shares, as applicable for a period of six months from the date hereof without the prior written consent of the Manager (not to be unreasonably withheld).
Application period
The application period in the Private Placement will commence today, 19 October 2023 at 16:30 CEST (after close of markets) and is expected to close on 20 October 2023 at 08:00 CEST (before opening of markets) (the “Application Period”). The Company may, however, in consultation with the Manager, at any time resolve to shorten or extend the Application Period on short or without notice. If the Application Period is shortened or extended, any other dates referred to herein may be amended accordingly.
Offering structure
The Private Placement will be divided into two tranches.
The first tranche (“Tranche 1”) will consist of up to 18,002,309 Offer Shares, which equals the maximum number of shares the Board may issue pursuant to the authorization granted by the annual general meeting in the Company on 15 June 2023 (the “Board Authorization”) and a second tranche with 60,122,691 Offer Shares (“Tranche 2”), to be issued by an extraordinary general meeting in the Company expected to be held on or about 3 November 2023 (the “EGM”) which will be summoned shortly after notification of allocation in the Private Placement.
Allocation
Allocation of Offer Shares will be determined at the end of the Application Period by the Board, at its sole discretion (in consultation with the Manager). The Company may focus on allocation criteria such as (but not limited to) pre-commitments, indications from the wall-crossing phase of the Private Placement, existing ownership in the Company, timeliness of the application, relative order size, sector knowledge, perceived investor quality and investment horizon. The Board may, at its sole discretion, reject and/or reduce any applications. There is no guarantee that any applicant will be allocated Offer Shares.
Notification of allocations are expected to be issued to the applicants on or around 20 October 2023 (before trading commences on Euronext Growth Oslo) through a notification to be issued by the Manager.
Applicants will receive a pro rata portion of Offer Shares in Tranche 1 and Tranche 2 based on their overall allocation in the Private Placement except for Kistefos AS mentioned above which will receive its entire allocation of Offer Shares in Tranche 2. The Company will seek to accommodate applicants who request to be allocated Offer Shares in Tranche 2 (implying that other investors may receive a larger portion of their initial allocation in Tranche 1).
Settlement
Offer Shares in Tranche 1 are expected to be settled on a delivery versus payment (“DvP”) basis on T+2 (T = notification of allocation date) expected on or about 24 October 2023, subject to the conditions for Tranche 1 having been met. The Offer Shares in Tranche 1 are not tradable on Euronext Growth Oslo before the share capital increase pertaining to the issuance of the Offer Shares in Trance 1 has been registered with the Norwegian Register of Business Enterprises (“NRBE”). The Company will announce when such registration has taken place, and the Company expects that the Offer Shares in Trance 1 will commence trading on Euronext Growth Oslo on or about 23 October 2023 after the mentioned announcement.
Offer Shares in Tranche 2 are expected to be settled on a DvP basis on X+3 (X = EGM date) expected on or about 8 November 2023, subject to the conditions for Tranche 2 having been met. The Offer Shares in Tranche 2 are not tradable on Euronext Growth Oslo before the share capital increase pertaining to the issuance of the Offer Shares in Trance 2 has been registered with the NRBE. The Company will announce when such registration has taken place, and the Company expects that the Offer Shares in Trance 2 will commence trading on Euronext Growth Oslo on or about 7 November 2023 after the mentioned announcement.
To facilitate swift settlement in both Tranche 1 and Tranche 2, a customary pre-payment agreement has been entered into between the Company and the Manager (the “Pre-Payment Agreement”).
Settlement in Tranche 1 and Tranche 2 is subject to the conditions for completion set out below.
Conditions for completion
The completion of Tranche 1 is subject to a resolution by the Board to issue the Offer Shares in Tranche 1 pursuant to the Board Authorization. The completion of Tranche 2 is subject to the completion of Tranche 1 and a resolution by the EGM to issue the Offer Shares in Tranche 2 as well as the Consideration Shares. Further to this, completion of both Tranche 1 and Tranche 2 in the Private Placement is subject to the Board resolving to consummate the Private Placement and allocate the Offer Shares as well as the Pre-Payment Agreement being in full force and effect.
Completion of Tranche 1 is not conditional upon completion of Tranche 2. The settlement of Offer Shares under Tranche 1 will remain final and binding and cannot be revoked, cancelled or terminated by the respective applicants if Tranche 2 is not completed. Completion of Tranche 1 and Tranche 2 is not conditional upon completion of the Vessel Acquisition.
The Company reserves the right to cancel and/or modify the terms of the Private Placement at any time and for any reason prior to notification of allocation. The applicants also acknowledge that the Private Placement as a whole (including Tranche 1), or just Tranche 2, will be cancelled if the relevant conditions are not fulfilled. Neither the Manager nor the Company, or any of its directors, officers, employees, representatives or advisors, will be liable for any losses if the Private Placement as a whole (including Tranche 1), or just Tranche 2, is cancelled and/or modified, irrespective of the reason for such cancellation or modification.
Potential uplisting
The intention of the Board is to pursue an uplisting to a regulated marketplace operated by the Oslo Stock Exchange within 12 months post completion of the Private Placement (always subject to favourable market conditions and the satisfaction of applicable listing requirements).
Dilutive instruments
The Company has the following outstanding financial instruments:
- Options outstanding: 695,000 options, which can be exercised at various intervals, with a strike price of NOK 8.20.
- Warrants outstanding: 346,097 warrants, which can be exercised at various intervals, with a volume weighted average strike price of NOK 2.41. 1,875,000 warrants, which can be exercised only given a demonstrated market price per share in the Company of NOK 24.60 within April 2025, with a strike price of NOK 0.10 (equivalent to the par value of the shares).
The Company will propose that the EGM authorizes the Board to issue shares (limited to 5% of the shares outstanding after the Private Placement) in connection with an updated employee incentive program intended to be implemented after the Private Placement.
Shearwater will (as described above) receive 20,123,625 Consideration Shares as part settlement for the Vessel Acquisition. The Consideration Shares will be issued in-kind by way of equitisation of a seller’s credit provided by Shearwater to the Company through a resolution by the upcoming EGM. The mentioned seller’s credit values the Consideration Shares at NOK 3.20 per share (equal to the share price level in the market at the time the agreement regarding the Vessel Acquisition was entered into).
Selling restrictions
The Private Placement will be made by the Company to investors subject to applicable exemptions from relevant prospectus requirements in accordance with Regulation (EU) 2017/1129 and the Norwegian Securities Trading Act of 2007 and is directed towards investors subject to available exemptions from relevant registration requirements, (i) outside the United States in reliance on Regulation S under the US Securities Act of 1933 (the “US Securities Act”) and (ii) in the United States to “qualified institutional buyers” (QIBs) as defined in Rule 144A under the US Securities Act, pursuant to an exemption from the registration requirements under the US Securities Act as well as to major U.S. institutional investors under SEC Rule 15a-6 to the United States Exchange Act of 1934. The Company may, however, at its sole discretion, allocate an amount below EUR 100,000 to the extent applicable exemptions from the prospectus requirements pursuant to the Norwegian Securities Trading Act and ancillary regulations are available, including to employees and directors of the Company and the Company group. Further selling restrictions and transaction terms will apply.
Subsequent offering and equal treatment considerations
The Company has considered the Private Placement in light of the equal treatment obligations under the STA section 5-14, section 3.1 of the Euronext Growth Rule Book Part II and Oslo Børs’ Circular no. 2/2014, and the Board is of the opinion that the proposed Private Placement is in compliance with these requirements. By structuring the Private Placement as a private placement, the Company will be in a position to raise capital in an efficient manner, with a lower discount to the current trading price and a significantly lower completion risks compared to a rights issue and without the underwriting commissions normally associated with such rights offerings. Furthermore, the number of Offer Shares to be issued in connection with the contemplated Private Placement implies that the dilution of existing shareholders should be more limited. A swift capital raise is also important considering the Company’s obligations in relation to the Vessel Acquisition. On this basis and based on an assessment of the current equity markets, the Board has considered the Private Placement to be in the common interest of the Company and its shareholders. As a consequence of the structure of the Private Placement, the shareholders’ preferential rights to subscribe for the Offer Shares will be deviated from. In order to limit any dilutive effect of the Private Placement, the Board will, after any resolution to proceed with the Private Placement, consider carrying out a subsequent offering of new shares at the Offer Price in the Private Placement which, subject to applicable securities law, will be directed towards shareholders in the Company as of close of trading 19 October 2023, as recorded in the VPS on 23 October 2023, who (i) were not included in the “wall-crossing” phase of the Private Placement, (ii) were not allocated Offer Shares in the Private Placement and (iii) are not resident in a jurisdiction where such offering would be unlawful and (in jurisdictions other than Norway) would require any prospectus, filing, registration or similar action.
Advisors:
Pareto Securities AS is acting as sole global coordinator and bookrunner.
Advokatfirmaet Schjødt AS is acting as legal counsel to the Company.
This information is subject to a duty of disclosure pursuant to the Company’s continuing obligations as a company listed on Euronext Growth Oslo. This information was issued as inside information pursuant to the EU Market Abuse Regulation, and was published by Odd Erik Rudshaug, Chief Financial Officer, at Argeo AS on the date and time provided.
For more information, please contact:
Trond Figenschou Crantz, CEO
Email: trond.crantz@argeo.no
Phone: +47 976 37 273
About Argeo
Argeo is an Offshore Service company with a mission to transform the ocean surveying and inspection industry by utilizing autonomous surface and underwater robotics solutions. Equipped with unique sensors and advanced digital imaging technology, the Autonomous Underwater Vehicles (AUV’s) will significantly increase efficiency and imaging quality in addition to contributing to significant reduction in CO2 emissions from operations for the global industry in which the Company operates.
The Company’s highly accurate digital models and digital twin solutions are based on geophysical, hydrographic, and geological methods from shallow waters to the deepest oceans for the market segments Oil & Gas, Renewables, Marine Minerals and Offshore Installations. Argeo was established in 2017 and has offices in Asker (Oslo), Tromsø, Stockholm, Houston, and Singapore. Since its incorporation, Argeo has carried out complex projects for some of Norway’s largest companies in the field.
The company is listed on Euronext Growth Oslo under the ticker: ARGEO.
Please visit www.argeo.no for more information.
Important notice:
This announcement is not and does not form a part of any offer to sell, or a solicitation of an offer to purchase, any securities of the Company. Copies of this announcement are not being made and may not be distributed or sent into any 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 applicable 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 sale in the United States of the securities mentioned in this announcement will be made solely to “qualified institutional buyers” as defined in Rule 144A under the Securities Act.
In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The expression “Prospectus Regulation” means Regulation (EU) 2017/1129 as amended (together with any applicable implementing measures in any Member State.
This communication is only being distributed to and is only directed at persons in the United Kingdom that are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) or (ii) high net worth entities, and other persons to whom this announcement 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”). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only for relevant persons and will be engaged in only with relevant persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.
Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as “believe”, “expect”, “anticipate”, “strategy”, “intends”, “estimate”, “will”, “may”, “continue”, “should” and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believe that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict, and are beyond their control. Actual events may differ significantly from any anticipated development due to a number of factors, including without limitation, changes in public sector investment levels, changes in the general economic, political and market conditions in the markets in which the Company operates, the Company’s ability to attract, retain and motivate qualified personnel, changes in the Company’s ability to engage in commercially acceptable acquisitions and strategic investments, and changes in laws and regulation and the potential impact of legal proceedings and actions. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The Company does not make any guarantee that the assumptions underlying the forward-looking statements in this announcement are free from errors nor does it accept any responsibility for the future accuracy of the opinions expressed in this announcement or any obligation to update or revise the statements in this announcement to reflect subsequent events. You should not place undue reliance on the forward-looking statements in this announcement.
The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice. The Company does not undertake any obligation to review, update, confirm, or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this announcement.
Neither the Manager nor any of its affiliates makes any representation as to the accuracy or completeness of this announcement and none of them accepts any responsibility for the contents of this announcement or any matters referred to herein.
This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities of the Company. Neither the Manager nor any of its affiliates accepts any liability arising from the use of this announcement.
The distribution of this announcement and other information may be restricted by law in certain jurisdictions. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.
Kilde
