Savo-Solar launches a rights issue of approx. EUR 4.2

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Savo-Solar launches a rights issue of approx. EUR 4.2 million with additional warrants and discloses information in the prospectus that has not been previously published

Savo-Solar Ltd. Company Announcement            20 November 2015 at 11.15 am (CET)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN PART, DIRECTLY OR INDIRECTLY, IN THE USA, AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND, SINGAPORE OR SOUTH AFRICA OR ANY OTHER JURSIDICTION WHERE SUCH PUBLICATION OR DISTRIBUTION IS UNLAWFUL.

Savo-Solar launches a rights issue of approximately EUR 4.2 million with additional warrants and discloses information included in the prospectus that has not been previously published

Following the announcement of plans to launch a rights issue on 17 November 2015, the Board of Directors of Savo-Solar Ltd ("Savo-Solar" or the "Company") has decided today to arrange a rights issue (the "Offering") of approximately EUR 4.2 million. The prospectus prepared in connection with the Offering contains information that has not been previously published. Such information is disclosed in this company announcement.

Summary of the Offering

  • The Offering will consist of a maximum of 10,591,620 new class A shares (the "Offer Shares"), representing approximately 66.67 per cent of the total number of the Company's shares outstanding after the Offering.
  • Savo-Solar gives all its shareholders registered in Savo-Solar's shareholder register maintained by Euroclear Finland Ltd ("Euroclear Finland") and Euroclear Sweden AB ("Euroclear Sweden") two (2) book-entry subscription rights (the "Subscription Rights") per each share held on the Offering record date. Each (1) Subscription Right entitles the holder to subscribe for one (1) Offer Share.
  • The record date for the Offering is 24 November 2015 with the last day of trading including the Subscription Rights on 20 November 2015 and the first day of trading excluding the Subscription Rights on 23 November 2015.
  • The subscription period for the Offer Shares (the "Subscription Period") commences on 27 November 2015 at 09:30 Finnish time (08:30 Swedish time), and ends on 15 December 2015 at 16:30 Finnish time (15:30 Swedish time) in Finland and on 11 December 2015 at 18:30 Finnish time (17:30 Swedish time) in Sweden.
  • The subscription price is EUR 0.40 or SEK 3.73 per Offer Share.
  • Approximately EUR 4.2 million before the transaction costs will be raised in the Offering if the Offering is fully subscribed.
  • In addition, Savo-Solar offers each subscriber of the Offer Shares one (1) warrant (the "Warrant") free of charge for every four (4) Offer Shares subscribed and paid for in the Offering, the subscription of which the Board of Directors has approved. Each Warrant entitles its holder to subscribe for one (1) new class A share in the Company for a subscription price of EUR 1.00 per share during the subscription period of 5 October 2016 - 21 October 2016. The maximum number of Warrants is 2,647,905 if the Offering is fully subscribed. 
  • Certain current shareholders of the Company have through subscription undertakings committed to subscribe for shares corresponding to approximately 15.9 per cent of the Offer Shares offered in the Offering. The subscription undertakings are conditional upon all the providers of subscription undertakings fulfilling their subscription undertakings to the extent the undertaking is paid by means of set off of the loan principal and interest receivables based on the loan agreement signed on 19 November 2015 (described below). The subscription undertaking of EUR 0.15 million in cash by the Finnish Innovation Fund Sitra ("Sitra") is also conditional upon the subscription of the Offer Shares in the Offering of at least EUR 2.5 million.
  • The Board of Directors of the Company shall resolve on offering any unsubscribed Offer Shares secondarily to shareholders and other investors who have submitted a subscription application concerning the Offer Shares during the Subscription Period without Subscription Rights.

Information that has not been previously published

The Board of Directors of Savo-Solar deems that the following new financial information could potentially be considered price sensitive.

On page 68 in the prospectus, under "Bank guarantees and counter guarantees" the following can be read:

"Additionally, the Company has on 19 November 2015 agreed with Suur-Savon Osuuspankki on increase of the guarantee limit of EUR 1,200.0 thousand to EUR 2,000.0 thousand. The increase is conditional upon fulfillment of a counter guarantee of 50 % for the increase, provided by Finnvera Oyj. This counter guarantee is conditional upon the Company receiving the share subscriptions of at least EUR 2.4 million in the Offering."

On page 55 in the prospectus, under "Recent development and material changes in financial position" the following can be read:

"The Company has entered into a loan agreement with Cleantech Invest Oyj, Sitra, Suur-Savon Osuuspankki and a member of the Board of Directors Teuvo Rintamäki on 19 November 2015. With the loan agreement Cleantech Invest Oyj has granted to the Company EUR 45,000, Suur-Savon Osuuspankki EUR 180,000, Sitra EUR 250,000 and Teuvo Rintamäki EUR 25,000 new loans. The fixed interest rate for the loans is 5 % and the maturity date for the loans is 31 January 2016. The lenders have committed to set off their principal and interest receivables based on the loan agreement against the subscription price of the Offer Shares in the Offering."

On pages 61-62 in the prospectus, under "Capitalisation and indebtedness" the following can be read:

"The tables below present Savo-Solar's capitalisation and indebtedness as of 30 September 2015. The figures have been prepared specifically for the Prospectus and are unaudited. Only interest-bearing debts are included.

Net financial indebtedness, EUR thousand 2015-09-30
A) Cash 144.1
B) Other liquid funds 0.0
C) Marketable securities 0.0
D) Liquidity A+B+C 144.1
E) Current financial receivables 0.0
F) Current liabilities from financial institutions 0.0
G) Current portion of non-current liabilities1 269.4
H) Other current financial liabilities 0.0
I) Current financial liabilities F+G+H 269.4
J) Net current financial indebtedness I-E-D 125.3
K) Non-current liabilities from financial institutions 1,916.3
L) Issued bonds 0.0
M) Other non-current liabilities 0.0
N) Non-current financial liabilities K + L + M 1,916.3
O) Net financial indebtedness J+N 2,041.6

1 The liabilities from financial institutions does not include the R&D loan granted by Tekes, amounting to EUR 22.8 thousand, since it is non-interest bearing due to the restructuring programme.

Equity and liabilities, EUR thousand 2015-09-30
Current interest bearing debt  
Against guarantee or surety 0.0
Against collateral 0.0
Without guarantee/surety or collateral1 269.4
Total current interest bearing debt 269.4
   
Non-current interest bearing debt  
Against guarantee or surety 0.0
Against collateral 0.0
Without guarantee/surety or collateral 1,916.3
Total non-current interest bearing debt 1,916.3
   
Equity  
Share capital 470.2
Invested unrestricted equity fund 8,454.7
Retained earnings -6,313.4
The period's result -2,502.5
Total equity 109.1

1 The liabilities from financial institutions does not include the R&D loan granted by Tekes, amounting to EUR 22.8 thousand, since it is non-interest bearing due to the restructuring programme."

Reasons for the Offering and use of proceeds

The Company's order backlog did not develop as planned after the IPO during the spring 2015, mainly because the start of the major projects pursued in Denmark took longer than expected. For this reason, the Company had to cut its revenue forecast for the financial year 2015 from EUR 4.0 million to 2.0-2.5 million on 23 June 2015. Due to the lowered revenue forecast and because the first project generated higher costs than expected, the Company has decided to arrange the Offering to secure its short-term working capital needs.

During the summer of 2015, the Company signed a third agreement with Løgumkloster Fjernvarme concerning the delivery of a collector field comprising approximately 5,500 square metres and worth approximately EUR 1.0 million. Furthermore, the Company has received the final confirmation on the delivery of a solar thermal collector field with a value of approximately EUR 2.0 million.

The Company will use the net proceeds from the Offering i) to secure its working capital needs in order to deliver the signed and upcoming orders in 2015-2016, and ii) on capacity-increasing investments to improve production efficiency and promote further product development.

In order to secure the delivery of the signed and upcoming orders in 2015-2016, approximately EUR 1.9 million of working capital must be reserved from the proceeds of the Offering for the upcoming 12 months from the date of this Prospectus. In addition, the estimated costs of the investments required for the increase of production capacity and efficiency in 2015 and 2016 will be approximately EUR 1.5 million.

The Offering

The Company is offering up to 10,591,620 new class A shares in the Company for subscription in accordance with the shareholders' preferential subscription right. The key terms of the Offering were published by the Company on 17 November 2015 in the company announcement regarding its plans to launch the Offering.

Certain current shareholders of the Company have through the subscription undertakings committed to subscribe for shares corresponding to approximately 15.9 per cent of the Offer Shares offered in the Offering. The subscription undertakings are conditional upon all the providers of subscription undertakings fulfilling their subscription undertakings to the extent the undertaking is paid by means of set off of the loan principal and interest receivables based on the loan agreement signed on 19 November 2015. The subscription undertaking of EUR 0.15 million in cash by Sitra is also conditional upon the subscription of the Offer Shares in the Offering of at least EUR 2.5 million.

Subscription locations of the Offering

The subscription locations of the Offering are as follows:

a) FIM Sijoituspalvelut Oy, premises at Pohjoisesplanadi 33 A, 00100 Helsinki, Finland (asiakaspalvelu@fim.com, tel.: +358 9 6134 6250) and

b) Mangold Fondkommission AB's website at www.mangold.se and Mangold Fondkommission AB's premises at Engelbrektsplan 2, 114 34 Stockholm, Sweden (emissioner@mangold.se, tel.: +46 8-503 01 580).

Prospectus

Savo-Solar has prepared a prospectus relating to the Offering approved by the Finnish Financial Supervisory Authority on 20 November 2015. The official Finnish language version of the prospectus as well as its unofficial English language translation, including a Swedish summary, is available at Savo-Solar's website (www.savosolar.fi/Rights_Issue_2015), Mangold Fondkommission AB's website (www.mangold.se/emissioner/Savosolar) and FIM Sijoituspalvelut Oy's website (www.fim.com) approximately as per 20 November 2015.

Preliminary timetable for the Offering

23 November 2015 First day of trading excluding the Subscription Rights
24 November 2015 Record date for the Offering
27 November - 9 December 2015 27 November 2015 Trading period for the Subscription Rights Trading in the temporary shares begins
27 November - 11 December 2015 The Subscription Period for the Offering in Sweden
27 November - 15 December 2015 The Subscription Period for the Offering in Finland
17 December 2015 Announcement of outcome of the Offering
Week 52, 2015 Last day of trading in the temporary shares on First North Finland
Week 53, 2015 Last day of trading in the temporary shares on First North Sweden
Week 1, 2016 Trading in the Warrants begins on First North Finland
Week 1, 2016 Trading in the Warrants begins on First North Sweden
5 October - 21 October 2016 The subscription period of shares with the Warrants

Advisers

Mangold Fondkommission AB is acting as financial adviser of the Company in the Offering. Smartius Oy is acting as the legal adviser of the Company on aspects of the Offering related to the Finnish law and Advokatfirman Westermark Anjou AB on aspects of the Offering related to the Swedish law.

For more information:

Ingrid Östhols, communication Phone: +46 721 810 867 E-Mail: ingrid.osthols@savosolar.se

Savo-Solar Ltd Managing Director Jari Varjotie Phone: +358 400 419 734 E-mail: jari.varjotie@savosolar.fi

Savo-Solar in brief

Savo-Solar provides solar thermal systems for heating of buildings, industrial processes and domestic hot water. Savo-Solar's systems are based on the verified world's most efficient 2 m2 collector utilizing MPE-absorbers with several patents pending. The absorbers are coated with a highly selective optical nano-coating. Savo-Solar is, according to the available information, the only company able to coat ready-made, complete absorbers. Focus is on large scale industrial applications such as district heating, industrial process heating and energy renovations of large buildings. Since 2011 the company has sold and delivered its products in over 17 countries on four continents. Savo-Solar's shares are listed on Nasdaq First North Sweden with the ticker SAVOS and on Nasdaq First North Finland with the ticker SAVOH. www.savosolar.fi.

The Company's Certified Adviser is Mangold Fondkommission AB, tel.: +46 8 5030 1550.

IMPORTANT NOTICE

This release or the information contained therein shall not be distributed, directly or indirectly, in Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, South Africa or the United States. The information contained in this release do not constitute an offer of, or invitation to purchase any securities in any area, where offering, procurement of or selling such securities would be unlawful prior to registration or exemption from registration or any other approval required by the securities regulation in such area. This release is not an offer for sale of securities in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended, and the rules and regulations issued by virtue of it. Savo-Solar has not registered, and does not intend to register, any offering of securities in the United States. No actions have been taken to register the shares or the offering anywhere else than in Finland and Sweden.

The information contained herein shall not constitute an offer of, or invitation to purchase any securities in any jurisdiction. This release is not a prospectus and does not constitute any offer, invitation or investment advice to subscribe for or purchase securities. Investors should not subscribe for or purchase any securities or make any investment decisions referred to herein except on the basis of information contained in a prospectus issued by Savo-Solar.

HUG#1968365

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