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Baltic Sea Properties AS – Private placement successfully placed

May 31 2024


Oslo, Norway, 31 May 2024 at 18:20 (CEST).

Reference is made to the stock exchange announcement published by Baltic Sea Properties AS (“BALT” or the “Company”, and together with the Company’s subsidiaries, “BSP”) on 23 May 2024 regarding the launch of a private placement of new shares in the Company (the “Offer Shares”) (the “Private Placement”).

Following close of the bookbuilding period, the Company is pleased to announce that the Private Placement has been successfully placed, and that the board of directors of the Company (the “Board”) has conditionally allocated 1,781,395 Offer Shares at a subscription price of NOK 49.00 per Offer Share (the “Subscription Price”), raising approximately NOK 87.3 million in gross proceeds.

Norne Securities AS and SpareBank 1 Markets AS (together, the “Managers”) acted as Joint Lead Managers and Joint Bookrunners in connection with the Private Placement.

The net proceeds to the Company from the Private Placement will be used for the Company’s development projects in the Baltics, as well as for general corporate purposes.

The completion of the Private Placement, final allocation and issuance of the Offer Shares are subject to the approval by the Company’s annual general meeting on 6 June 2024 (the “AGM”).

The following primary insiders were conditionally allocated Offer Shares at the Subscription Price:
– UAB Baltic Equity, a company controlled by James Andrew Clarke (Chairman of the Board) was conditionally allocated 1,448,979 Offer Shares (approximately NOK 70,999,971).
– Arthen Invest AS, a company controlled by Lars Christian Berger (CEO), was conditionally allocated 11,836 Offer Shares (NOK 579,964).

In addition to the approval from the AGM, 698,028 of the Offer Shares allocated to UAB Baltic Equity is subject to the AGM approving an amendment to § 10 of the Company’s articles of association (the “Articles of Association”) whereby the threshold for triggering a mandatory bid on the Company’s shares is increased from 1/3 to 40%.
If the AGM does not approve the amendment to § 10 of the Articles of Association, the size of the Private Placement and the subscription by UAB Baltic Equity will be reduced by 698,028 Offer Shares so that UAB Baltic Equity’s post-transaction ownership in the in the Company does not exceed 1/3 of the share capital and accordingly, that no mandatory bid is triggered by UAB Baltic Equity’s subscription in the Private Placement.

Completion of the Private Placement, by delivery of the Offer Shares to investors, is subject to (i) all necessary corporate resolutions being validly made by the Company, including (without limitation) the AGM resolving to consummate the Private Placement and issue and allocate the Offer Shares, and (ii) registration of the share capital increase relating to the Offer Shares in the Norwegian Register of Business Enterprises.

Delivery of the Offer Shares will take place following registration of the share capital increase pertaining to the Private Placement in the Norwegian Register of Business Enterprises, expected to take place on or about 11 June 2024. The Offer Shares will not be tradable on the Euronext Growth Oslo until the Offer Shares have been registered by the Norwegian Register of Business Enterprises.

The Private Placement represents a deviation from the shareholders’ pre-emptive right to subscribe for the Offer Shares. The Board has considered the Private Placement in light of the equal treatment obligations under the Norwegian Private Limited Companies Act, the Norwegian Securities Trading Act, and the rules on equal treatment under Euronext Growth Rule Book II, and the Oslo Stock Exchange’s Guidelines on the rule of equal treatment, and deems that the proposed Private Placement is in compliance with these obligations. The Board is of the view that it will be in the common interest of the Company and its shareholders to raise equity through a private placement. By structuring the equity raise as a private placement, the Company is expected to raise equity efficiently, with a lower discount to the current trading price, at a lower cost and with a significantly reduced completion risk compared to a rights issue.

The Company has considered a rights issue instead of a private placement. The Company is of the opinion that a rights issue would have to be on a fairly significant discount, and guaranteed by a consortium of underwriters which would also be an added cost for the Company. In summary, the Company expects to be in a position to complete the share issue in today’s market conditions in an efficient manner, at a higher subscription price and at significantly lower cost and with a lower completion risk than would have been the case for a rights issue. Further, the Subsequent Offering, as defined below, will, if implemented secure that eligible shareholders will receive the opportunity to subscribe for new shares in the Company at the Subscription Price. As a consequence of the private placement structure, the shareholders’ preferential rights to subscribe for the Offer Shares have been proposed deviated from.

The Company intends to carry out a subsequent offering of up to 1,020,408 new shares raising gross proceeds of up to approximately NOK 50 million (the “Subsequent Offering”). The Subsequent Offering will comprise new shares offered at the same subscription price as the Offer Shares, and will be directed towards existing shareholders in the Company as of 31 May 2024 (as registered in the VPS two trading days thereafter), 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 or would (in jurisdictions other than Norway) require any prospectus, filing, registration or similar action. The Company reserves the right in its sole discretion to not conduct or cancel the Subsequent Offering.

Further, the Subsequent Offering is subject to, inter alia, (i) completion of the Private Placement, (ii) the AGM authorizing the Board to carry out the Subsequent Offering, (iii) approval by the Board, and (iv) the publication of a national prospectus, expected to start on or about 11 June 2024. Further details on the Subsequent Offering will be made public by the Company in due course.

AGP Advokater is acting as Norwegian legal counsel to the Company in connection with the Private Placement. Advokatfirmaet Selmer AS is acting as legal counsel to the Managers.

For additional information, please contact:
Lars Christian Berger
Phone: +47 930 94 319

This information is considered to be inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to section 5-12 the Norwegian Securities Trading Act. This stock exchange announcement was published by Lars Christian Berger, CEO on the time and date provided.

Baltic Sea Properties is an open-ended and fully integrated real estate investment company. The company is among the Baltics’ leading real estate investors and developers – owning a diversified cash flow generating portfolio of modern real estate in the logistics, industrial and commercial segments.

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 “US 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 US 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 US 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 EU Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The expression “EU 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 or include certain forward-looking statements. Forward-looking statements are statements that are not historical facts and may include, without limitation, any statements preceded by, followed by or including words such as “aims”, “anticipates”, “believes”, “can have”, “continues”, “could”, “estimates”, “expects”, “intends”, “likely”, “may”, “plans”, “projects”, “should”, “target” “will”, “would” and words or expressions of similar meaning or the negative thereof. These statements are based on the management’s current views and assumptions and involve both known and unknown risks and uncertainties and assumptions that are within and outside the management’s control.
Although the Company believes that the expectations implied in any such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be correct. Actual results, performance or events may differ materially from those set out or implied in the forward-looking statements. No representation is made that any of these forward-looking statements or forecasts will come to pass or that any forecast result will be achieved. The forward-looking statements included in this announcement represent the Company’s views as of the date of this announcement and subsequent events and developments may cause the Company’s views to change. The Company disclaims any obligation to update forward-looking information except as required by law. Readers should not place undue reliance on any forward-looking statement.
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 Managers nor any of their 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 Managers nor any of their 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.