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Asker, 19 October 2023. Reference is made to the stock exchange release from Argeo AS (“Argeo” or the “Company”) (Euronext Growth Oslo: ARGEO) published on 19 October 2023 regarding a contemplated private placement of NOK 250 million in gross proceeds (the “Private Placement”) with a subscription price of NOK 3.20 per Offer Share. Pareto Securities AS is acting as sole manager and sole bookrunner (the “Manager”) in the Private Placement.
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The Company is pleased to announce that it has allocated a total of 78,125,000 new shares (the “Offer Shares”) in the Private Placement at a price per Offer Share of NOK 3.20 (the “Offer Price”), raising gross proceeds of NOK 250 million. The Private Placement attracted strong interest from new and existing investors and was substantially over-subscribed.
The net proceeds 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 acquisition of the seismic vessel SW Bell (Ulstein SX124 X-BOW) (the “Vessel Acquisition”) from Shearwater Geoservices Holding AS (“Shearwater”) (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.
The Private Placement will be settled in two tranches, consisting of 18,002,309 Offer Shares in tranche 1 (“Tranche 1”), corresponding to the Board Authorization (as defined below), and 60,122,691 Offer Shares in tranche 2 (“Tranche 2”).
The board of directors of the Company (the “Board”) has today, pursuant an authorization granted by the annual general meeting on 15 June 2023 (the “Board Authorization”), resolved to issue Offer Shares in Tranche 1 and to call for an extraordinary general meeting (the “EGM”) to be held on or about 3 November 2023 to, inter alia, approve the issuance of the Offer Shares in Tranche 2 and 20,123,625 consideration shares (the “Consideration Shares”) to Shearwater as part settlement for the Vessel Acquisition, election of a new board representative from Shearwater and to authorize the Board to issue shares in any Subsequent Offering (as defined below). 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). Furthermore, 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. An EGM will be called for after notification of allocation in the Private Placement, including through a separate stock exchange notice.
Following the issuance of Offer Shares in the Private Placement and Consideration Shares, the Company will have a share capital of 19,263,982.90, divided into 192,639,829 shares.
Applicants having been allocated shares 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 (being a pre-committing investor) who will receive its entire allocation of Offer Shares in Tranche 2.
Allocation to investors will be communicated 20 October 2023, and the Private Placement is expected to be settled by the Manager on a delivery-versus-payment (“DvP”) basis on or about 24 October 2023 with respect to Tranche 1 and or about 8 November 2023 with respect to Tranche 2, subject to processing time with the Norwegian Register of Business Enterprises (“NRBE”) pertaining to registration of the respective share capital increases (such registration to be notified in separate stock exchange notices on the respective NRBE registration dates). The DvP settlement of Offer Shares in Tranche 1 and Tranche 2 is both facilitated by a pre-payment agreement entered into between the Company and the Manager (the “Pre-Payment Agreement”).
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 NRBE and the share capital increase pertaining to Tranche 1 has been announced by the Company, expected on or about 23 October 2023. 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 and the share capital increase pertaining to Tranche 2 has been announced by the Company, expected on or about 7 November 2023.
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 is subject to 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 following close associates to persons discharging managerial responsibilities (“PDMRs”) have been allocated the following Offer Shares in the Private Placement (A PDMR notification form will be published in a separate stock exchange notice):
- Kistefos AS, a company closely related to board director, Lars Petter Ottem Utseth, has been allocated 16,250,000 Offer Shares and will following completion of the Private Placement control 40,671,837 shares in the Company; and
- Redback AS, a company closely related to chair of the Board, Jan P. Grimnes, has been allocated 625,000 Offers Shares and will following completion of the Private Placement own 6,794,512 shares in the Company.
In relation to the Private Placement, the Company, current members of the Company’s executive management and Board, Kistefos AS and Shearwater, has entered into customary lock-up undertakings 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).
Furthermore, it is the intention of the Board 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).
Subsequent offering and equal treatment considerations
Completion of the Private Placement implies a deviation from the pre-emptive rights of the existing shareholders of the Company under the Norwegian Private Limited Companies Act. When resolving the issuance of the Offer Shares in the Private Placement, the Board considered this deviation and also 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. By structuring the Private Placement as a private placement, with a Subsequent Offering (as defined below), the Company was able 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. A swift capital raise was also important considering the Company’s obligations in relation to the Vessel Acquisition. On this basis, the Board is of the opinion that there are sufficient grounds to deviate from the pre-emptive rights and that the Private Placement is in compliance with the equal treatment requirements.
To mitigate the dilution of existing shareholders not participating in the Private Placement, the Board has resolved to undertake a subsequent offering (the “Subsequent Offering”) of up to 18,750,000 new shares directed towards the Company’s shareholders as of close of trading 19 October 2023, as recorded in the Norwegian Central Securities Depository (Euronext Securities Oslo) 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 (the “Eligible Shareholders”). The subscription price in the Subsequent Offering will be equal to the Offer Price. The Eligible Shareholders will receive non-transferrable subscription rights in the Subsequent Offering. Over-subscription will be permitted for Eligible Shareholders. Subscription without subscription rights will not be permitted in the Subsequent Offering.
The Subsequent Offering is subject to i) the EGM resolving to approve the issuance of Offer Shares in Tranche 2 and authorizing the Board to issue shares in the Subsequent Offering, ii) the publication of an offering prospectus pertaining to the Subsequent Offering and iii) the prevailing market price of the Company’s shares following the Private Placement. The Board may decide that the Subsequent Offering will not be carried out in the event that the Company’s shares trade at or below the subscription price (i.e. the Offer Price) in the Subsequent Offering at meaningful volumes.
Further information regarding the Subsequent Offering will be announced in separate stock exchange notices.
Advisors:
Pareto Securities AS is acting as sole manager and sole 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.
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