Helsinki, Finland, 2013-11-14 17:33 CET (GLOBE NEWSWIRE) -- Ixonos Plc Stock Exchange Release 14 November 2013 at 18:30
Not to be published in or distributed to the United States of America, Canada, Australia, Hong Kong, South Africa or Japan
The Finnish Financial Supervisory Authority has on 14 November 2013 approved Ixonos Plc's (”Ixonos" or the ”Company”) securities note prepared pursuant to the Finnish Securities Market Act (the ”Securities Note”) in relation to the Company's rights issue announced on 11 November 2013 (the ”Rights Issue”). The prospectus relating to the Rights Issue comprises of the Securities Note and the registration document dated 17 January 2013 (the "Registration Document" and, together with the Securities Note, the "Prospectus"). The Registration Document contains information on the Company, its business and its financial position, and the Securities Note contains information on the Rights Issue and a summary of the information contained in the Registration Document and the Securities Note. In addition, the Securities Note contains an update of certain information contained in the Registration Document.
The Securities Note is available during its validity as of 14 November 2013, at the latest, on the Company’s Web Page http://investor.fi.ixonos.com / in digital form and in printed form at the Company’s headquarters, Ixonos Plc, Hitsaajankatu 24, 00810 Helsinki, Finland and at the service center of NASDAQ OMX Helsinki Ltd, Fabianinkatu 14, 00100 Helsinki during the Rights Issue. The Registration Document has been available in digital form as of 21 January 2013. The Prospectus is published and available only in the Finnish language.
The Prospectus contains previously unpublished material information as follows:
Financial covenants, breach of covenants and waivers from the financiers concerning immediate repayment of loans
In relation to Ixonos' debt financing, no securities interests outside the ordinary have been granted. The most important financial covenants agreed with external financiers are to a certain extent the ratio between interest bearing net debs as well as earnings before interest, taxes, depreciations and amortizations (EBITDA). Depending on the financier and the calculation model, the above-mentioned ratio shall be 3.0 or 2.5. In addition, part of the debt financing contains a financial covenant according to which the Company’s equity ratio must not fall below 35%. The Company has on 30 June 2013 breached against financial covenants in its loan agreements, but has received waivers from financiers to exempt the Company from immediate payback of loans. The waivers are valid until 31 December 2014. Due to the waiver period, the Company has booked the relevant loans to current liabilities in the interim report for the period ending on 30 September 2013. On 30 September 2013, the balance sheet non-current liabilities include loans described above in the amount of EUR 7.2 million. The fulfillment of the financial covenants is examined twice a year, on 30 June and 31 December.
The Company finances its operations with cash flow from operations, with borrowed capital or by increasing its equity related financing. The Company’s financial risk management is presented in the Company’s financial statements for 2012 in note “31. Financial Risk Management”.
Working capital statement
The Company's present working capital as at the date of the Prospectus is not sufficient for its needs during the next 12 months. The Company considers at the date of the Prospectus that its working capital is sufficient for its needs for approximately six months provided that the Rights Issue is completed with minimum net proceeds of 5.0 MEUR and that the Company's s cash flow projections for 2014 are fulfilled.
The insufficiency of the Company's present working capital as at the date of the Prospectus for its needs during the next 12 months depends on, inter alia, the following:
- a decrease in purchases by and change in strategy of the major customer as well as the decreased cash flow resulting therefrom
- a greater delay than expected in getting new major customers and the increased cash flow resulting therefrom
- generation of loss from a project to be implemented with an Asian customer and the delay in receipt of payments
- a heavy cost structure as compared to the volume of sales
- short maturity of financing, including its amortization
- costs relating to restructuring of the Company's activities
The Company has implemented and will implement a number of actions to secure its financial position:
- the Rights Issue, including receipt of related subscription commitments and an underwriting commitment
- The Company has on 8 October 2013 announced its plan to raise, in addition to the Rights Issue, up to EUR 3.5 million by issuing shares in a directed share Issue ("Directed Share Issue") or option rights or other special rights entitling to shares that are set out in Chapter 10, Section 1 of the Companies Act ("Options or Other Special Rights"). The Company continues its preparations concerning a Directed Share Issue and an issue of Options or Other Special Rights within the frames set by the Board authorization following the Rights Issue.
- The Company announced its new strategy on 22 October 2013. The Company has chosen as its focus areas customer segments where the mobile internet technology is seen as powerfully changing the earning logic of the focus customer group. The Company believes that its capabilities have significant growth potential in terms of sales within these segments.
- The Company has continued to adjust its costs and it will, if needed, decrease them further through, among other things, statutory employer-employee negotiations. Also concerning fix costs the Company has implemented and will continue to implement adjustments in relation to, among other things, costs for premises. Results of cost savings initiatives that have already been initiated will through changes in the costs structure increase the profitability during the autumn of 2013 and during 2014.
- Waivers concerning financial covenants in loans granted by the Company's financiers according to which waivers such loans are not terminated prior to 31 December 2014 as a result of breaches of covenants.
- The agreement with Turret Oy Ab ("Turret") concerning postponement of amortizations of loans under certain circumstances until 31 December 2014: In connection with the Rights Offering Turret has on 7 November 2013 given an undertaking according to which Turret will at the earliest on 31 December 2014 require the Company to repay the short-terms loan granted by Turret in aggregate amount of EUR 3.5 million if the Rights Issue is completed by 20 December 2013 in a minimum net amount of EUR 4.5 million. Turret shall not set off the above-mentioned loans against the subscription price resulting from share subscriptions based on the subscription commitment and the underwriting commitment. According to the undertaking, Turret has the right, if requested by it, to convert such loans, partly or in their entirety, into share capital, a hybrid loan or another equity instrument pursuant to IFRS that is issued by Ixonos on arms' length terms. If the Rights Issue, the Directed Share Issue and the issue of Options or Other Special Rights (as defined below, together the "Issues") are completed prior to 31 December 2014 in a minimum amount of MEUR 5, has Turret the right to request that such loans, including interest, are repaid with the amount that the net amount of the Issues exceeds MEUR 5. The Board of Directors of the Company and the financiers being party to the Company's financing agreement have accepted the undertaking. If the Rights Issue is not completed by 20 December 2013 in a minimum net amount of EUR 4.5 million, Turret may require that the loans are repaid in accordance with relevant loan agreements to the effect that 1 MEUR falls due on 30 November 2013 and MEUR 2.5 falls due on 31 December 2013.
The Company considers at the date of the Prospectus that its working capital is sufficient for its needs for approximately six months provided that the Rights Issue is completed with minimum net proceeds of 5.0 MEUR and that the Company's s cash flow projections for 2014 are fulfilled.
If the effects of the above-mentioned actions are not fulfilled as planned, this may result in loss of working capital, termination of finance agreements and difficulties in continuing the Company's business operations during the next six months. If the Rights Issue does not generate net proceeds in an amount of 5.0 MEUR or if the Company's s cash flow projections for 2014 are not fulfilled, the Company will probably lose its liquidity without additional actions, nor will it under these circumstances be able to finance its planned operations or repay its debt in accordance with the original payment terms. The above-mentioned loss of liquidity may, at worst, result in the commencement of liquidation, company reorganization or bankruptcy proceedings.
If the above-mentioned conditions for sufficiency of the working capital for the Company's needs for the next six months are not fulfilled, the deficiency must be covered through other actions, such as (i) use of the Board authorization for, inter alia, the Directed Share Issue and the issue of Options or Other Special Rights, (ii) conversion of Turret's loans into equity instruments as set out above, (iii) restructuring or reorganization of the Company's operations, (iv) proceeds result from sales of the Company's businesses or assets, (v) additional financing, (vi) restructuring of the Company's financing or (vii) any combination of the above.
The sufficiency of the working capital during the second half of 2014 requires the materialization of the cash flow projections for 2014 at a higher level than expected or restructuring of the financing taking, in particular, into account the maximum amount of loans falling due on 31 December 2014 being MEUR 5.5, including loans by Turret in an amount of MEUR 3.5 and the expiration on 31 December 2014 of waivers by the financiers according to which the loans will not be terminated based on breach of financial covenants. As a result of insufficiency of working capital, the Company may lose its liquidity, nor will it be able to finance its planned operations or repay its debt in accordance with the original payment terms. The above-mentioned loss of liquidity may, at worst, result in the commencement of liquidation, company reorganisation or bankruptcy proceedings.
If the above-mentioned conditions for sufficiency of the working capital for the Company's needs for the second half of 2014 are not fulfilled, the deficiency must be covered through other actions, such as (i) use of the Board authorisation for, inter alia, the Directed Share Issue and the issue of Options or Other Special Rights, (ii) conversion of Turret's loans into equity instruments as set out above, (iii) restructuring or reorganisation of the Company's operations, (iv) proceeds result from sales of the Company's businesses or assets, (v) additional financing, (vi) restructuring of the Company's financing or (vii) any combination of the above.
Helsinki, 14 November 2013
IXONOS OYJ
The Board of Directors
Additional Information
Esa Harju, CEO and President, tel. +358 40 844 3367 , esa.harju@ixonos.com
Teppo Talvinko, CFO, puh. +358 40 7153 660 , teppo.talvinko@ixonos.com
Distribution:
NASDAQ OMX Helsinki
Main media
DISCLAIMER
The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States, Canada, Australia, Hong Kong, South Africa or Japan. These written materials do not constitute an offer of securities for sale in the United States, nor may the securities be offered or sold in the United States absent registration or an exemption from registration as provided in the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder. The Company does not intend to register any portion of the offering in the United States or to conduct a public offering of securities in the United States.
The issue, exercise and/or sale of securities in the offering are subject to specific legal or regulatory restrictions in certain jurisdictions. The Company and Pohjola Corporate Finance Oy assume no responsibility in the event there is a violation by any person of such restrictions.
The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction. Investors must neither accept any offer for, nor acquire, any securities to which this document refers, unless they do so on the basis of the information contained in the applicable prospectus published or offering circular distributed by the Company.
The Company has not authorized any offer to the public of securities in any Member State of the European Economic Area other than Finland. With respect to each Member State of the European Economic Area other than Finland and which has implemented the Prospectus Directive (each, a “Relevant Member State”), no action has been undertaken or will be undertaken to make an offer to the public of securities requiring publication of a prospectus in any Relevant Member State. As a result, the securities may only be offered in Relevant Member States (a) to any legal entity which is a qualified investor as defined in the Prospectus Directive; or (b) in any other circumstances falling within Article 3(2) of the Prospectus Directive. For the purposes of this paragraph, the expression an “offer of securities to the public” means the communication in any form and by any means of sufficient information on the terms of the offer and the securities to be offered so as to enable an investor to decide to exercise, purchase or subscribe the securities, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.
This communication is directed only at (i) persons who are outside the United Kingdom or (ii) persons who have professional experience in matters relating to investments falling within 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) 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.
