NOTE to implement SEK 87 m underwritten rights issue


The Board of Directors of NOTE AB (publ) (“NOTE” and the “Company”) has decided to implement an underwritten new issue of some SEK 87 m through the issuance of new shares with preferential rights for NOTE’s shareholders. The Board of Directors’ issue decision is conditional on the approval of an Extraordinary General Meeting (EGM) of the company on 7 April 2010. This new issue is being conducted to enable NOTE to be financially secure for its ongoing structural transformation and to exploit business opportunities on the market.

• One (1) existing NOTE share will entitle the holder to subscribe for two (2) new shares at a subscription price of SEK 4.50 per share.

• An EGM of NOTE will be held on 7 April 2010 in Danderyd, Sweden.

• Assuming approval of the new issue at the EGM, the record date for rights to the new issue will be 12 April 2010.

• This new issue is fully underwritten by a subscription agreement and guarantee commitment by NOTE’s major shareholders.

Preliminary schedule for new issue
7 April 2010 EGM of NOTE to consider approval of the new issue
8 April 2010 First day of trading in the share ex rights for participation in the new issue
12 April 2010 Record date, i.e. shareholders recorded in the share register on this date will receive subscription rights entitling them to participate in the new issue
16 April 2010 Scheduled date for publication of prospectus containing further details and terms and conditions of the new issue
22 April 2010 – 3 May 2010 Trading in subscription rights
22 April 2010 – 6 May 2010 Subscription period
On or around 11 May 2010 Publication of the outcome of the new issue
Latter half of May New issue completed

Background and motive for the new issue
When the financial crisis hit the world in autumn 2008, it changed NOTE’s circumstances fundamentally. All sectors and customer segments were affected largely simultaneously, and volumes on the company’s current assignments contracted in a short period. Additionally, NOTE faced a structural challenge because the company’s largest customer in its Telecom segment decided to amend its product range. NOTE’s sales fell by nearly 30% year on year in 2009. Despite significant cost savings, reduced sales meant that profits were unsatisfactory.

Over and above previously implemented major cost savings, an overhaul of the group’s units has been completed. The intention is to utilise NOTE’s unique strengths and skills in the high mix/low-volume market segment even better. The objective is to make savings and rationalization measures in 2010 to provide a minimum positive profit effect of SEK 50 m annualized. As part of this programme, NOTE will concentrate its production units in Sweden and other countries further. The cost of these actions is estimated at some SEK 45 m, which will be charged to profits in the first quarter of 2010. In the short term, this will result in deterioration of NOTE’s equity/assets ratio, which was 29.7% at year-end.

This new issue is being conducted to enable NOTE to be financially secure for its ongoing structural transformation and to enable NOTE to exploit business opportunities on the market. To summarise, the proceeds from the new issue will be used to implement structural measures decided and continued concentration on sales growth, primarily in the Nordic region, in the high mix/low volume market segment.

Terms and conditions of the new issue
The proposed new issue implies a right for NOTE’s existing shareholders to, for every one (1) share of NOTE held, subscribe for two (2) newly issued shares at the subscription price of SEK 4.50 with preferential rights. If not all shares are subscribed with preferential rights, shareholders and other parties are entitled to subscribe for shares without preferential rights. Granting of shares subscribed without preferential rights will be firstly to such subscribers that have also subscribed for shares with preferential rights. The record date at Euroclear Sweden AB (formerly VPC AB) for rights to participate in the rights issue is 12 April 2010, and the subscription period runs from 22 April 2010 to 6 May 2010, both dates inclusive, or a later date decided by the Board of Directors.

The Board of Directors’ decision on the new issue requires the approval of an EGM held on Wednesday, 7 April 2010 at 2 p.m. at Danderyds Kontorshotell, Svärdvägen 21, Danderyd, Sweden. As part of the new issue, the Board of Directors has decided to submit additional proposals to the EGM regarding amendments to the Articles of Association. An invitation to the EGM is being published today, 8 March 2010, through a press release and will be published in Swedish daily newspaper Svenska Dagbladet and the Swedish Official Gazette on 10 March 2010, and also be available on the Company’s website, www.note.eu.

Subscription agreement and guarantee commitment
Investment AB Öresund, MGA Placeringar AB, Catella Fondförvaltning AB, Bruce Grant via companies, Herma Securities AB and CLS Holding plc via subsidiaries, which are some of NOTE’s largest shareholders, support this new issue have agreed both to vote in favour of the new issue at the EGM, and to subscribe for shares in the new issue corresponding to their respective participating interests in NOTE, corresponding to a total of some 33% of the new issue. Assuming the satisfaction of certain conditions, the remainder of the new issue is guaranteed by Investment AB Öresund, MGA Holding AB, Catella Fondförvaltning AB, Herma Securities AB and CLS Holding plc via subsidiaries. Accordingly, the new issue is fully underwritten through subscription agreements and guarantee commitments.

Financial and legal advisers
HQ Bank is financial adviser and law firm Advokatfirman Vinge is legal adviser to NOTE for the new issue.

For more information, please contact:
Göran Jansson, Acting CEO and President of NOTE, tel. +46 (0)8 568 99006, +46 (0)70 698 8572
Henrik Nygren, CFO of NOTE, tel. +46 (0)8 568 99003, +46 (0)70 977 0686

About NOTE
NOTE’s business concept is to offer services in the production and logistics of electronics-based products. NOTE has a presence in Sweden, Norway, Finland, the UK, Estonia, Lithuania, Poland and China. In 2009, net sales were SEK 1,200 m; the group has approximately 1,000 employees. For more information, please go to www.note.eu.

This press release contains information that is mandatory for NOTE to publish pursuant to the Swedish Financial Instruments Trading Act and/or the Swedish Securities Markets Act. This information was submitted for publication at 8:30 a.m. on 8 March 2010.

Publication or distribution of this press release may be subject to legal restrictions in certain jurisdictions, and persons in those jurisdictions where this press release has been published or distributed should familiarise themselves, and comply, with such legal restrictions.

This press release is not intended for persons in the US, Canada, Australia, Hong Kong, Japan or other country where the offering or sale of subscription rights, paid-up subscribed shares (Sw. betalade tecknade aktier, BTA) or new shares is not permitted. This press release may not be released, published or distributed directly or indirectly in or to the US, Canada, Australia, Hong Kong, Japan or other country where such measure is wholly or partly subject to legal restrictions or where such measure may imply requirements for additional prospectuses, other offering documentation, registration or other measures over and above those ensuing from Swedish law. Nor may information in this press release be passed on, reproduced or disclosed in such a manner that conflicts with such restrictions or that may imply requirements for further prospectuses, other offering documentation, registration or other measures. Failure to comply with this instruction may constitute a breach of the United States Securities Act of 1933 (“The Securities Act”), and amendments, or applicable laws in other jurisdictions.

This press release does not contain, nor constitutes an invitation or offering to acquire, sell, subscribe or in other way trade in shares, subscription rights or other securities of NOTE AB (publ). An invitation to affected persons to subscribe for shares in NOTE AB (publ) will be effected exclusively through the prospectus that NOTE AB (publ) expects to be able to publish in mid-April 2010.

Neither subscription rights, paid-up subscribed shares (BTA) nor new shares will be registered pursuant to The Securities Act or any provincial law in Canada, and may not be transferred or offered for sale in the US or Canada or to persons domiciled in Canada, or on such persons’ behalf other than in accordance with exemptions from, or in a transaction that is not subject to, the liability for registration pursuant to The Securities Act, or in such exceptional cases that do not require registration pursuant to a provincial law in Canada.

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