Lemminkäinen Board of Directors has decided on the Terms and Conditions of a EUR 29.3 million Rights Offering

LEMMINKÄINEN CORPORATION STOCK EXCHANGE RELEASE 22 AUGUST AT 10:20 A.M.
 

Not for publication or distribution, directly or indirectly, in or into Australia, Canada, Hong Kong special administrative region of the People's Republic of China, Japan, New Zealand, South Africa, Singapore or the United States or any other jurisdiction in which the distribution or release would be unlawful.

LEMMINKÄINEN BOARD OF DIRECTORS HAS DECIDED ON THE TERMS AND CONDITIONS OF A EUR 29.3 MILLION RIGHTS OFFERING

The rights offering in brief:

• Rights offering of EUR 29.3 million to strengthen Lemminkäinen's balance sheet
• Two (2) new shares for eleven (11) existing shares held on the record date of 27 August 2014
• Subscription price of EUR 8.20 per new share
• Lemminkäinen shares will trade ex-rights from 25 August 2014
• Subscription period begins on 1 September 2014 and ends on 17 September 2014
• Trading in subscription rights begins on 1 September 2014 and ends on 10 September 2014
• Fully underwritten rights offering through shareholder subscription commitments and bank underwriting

Overview of the Rights Offering

The Board of Directors of Lemminkäinen Corporation ("Lemminkäinen" or the "Company") has, based on the authorization granted by the Annual General Meeting of shareholders on 9 April 2014, resolved on the rights offering of EUR 29.3 million (the "Offering") to raise net proceeds of EUR 27.1 million. The proceeds from the Offering are intended to be used to strengthen the balance sheet and to secure a sufficient financial flexibility for the implementation of the Company's strategy.

Lemminkäinen is offering for subscription to its shareholders a total of 3 569 724 new shares (the "Offer Shares"). Lemminkäinen grants to each of its shareholders who are registered in the Company’s shareholders’ register maintained by Euroclear Finland Ltd one (1) freely transferable subscription right (the "Subscription Right") in the form of a book-entry for each share owned on the record date 27 August 2014 (the "Record Date") of the Offering. Every eleven (11) Subscription Rights will entitle their holder to subscribe for two (2) Offer Shares at the Subscription Price of EUR 8.20 per Offer Share (the "Subscription Price"). The Subscription Price corresponds to an implied discount to the theoretical ex-rights price of approximately 35 percent, based on Lemminkäinen’s closing share price of EUR 13.45 on 21 August 2014 on the Helsinki Stock Exchange. No fractions of the Offer Shares will be allotted and a Subscription Right cannot be exercised partially.

Shares will trade ex-rights from 25 August 2014. The subscription period commences on 1 September 2014 and expires on 17 September 2014 at 4.30 pm EET. Public trading of the Subscription Rights on the Helsinki Stock Exchange commences on 1 September 2014 and expires on 10 September 2014.

Assuming the Offering is fully subscribed for, the Offer Shares represent 18.2 per cent of the existing shares and related voting rights prior the Offering and 15.4 per cent of all shares and related voting rights after the completion of the Offering.

Existing shareholders of Lemminkäinen and other investors may subscribe for Offer Shares also without Subscription Rights (the "Secondary Subscription". Offer Shares will be allocated to subscribers in the Secondary Subscription in the event that not all the Offer Shares have been subscribed for pursuant to the exercise of Subscription Rights. The allocation of Offer Shares in the Secondary Subscription will be primarily determined per book-entry account in proportion to the number of Subscription Rights exercised for subscription of Offer Shares.

Lemminkäinen expects to publish the preliminary results of the Offering in a stock exchange release on or about 19 September 2014 and the final results of the Offering on or about 23 September 2014.

The terms and conditions of the Offering are attached to this stock exchange release.

Publication of the prospectus

In relation to the Offering, Lemminkäinen has submitted a Finnish language prospectus for the approval of the Finnish Financial Supervisory Authority, and such approval is expected to be received on 25 August 2014. The Finnish language prospectus is expected to be available on Lemminkäinen's website www.lemminkainen.fi/osakeanti2014 on 26 August 2014 and expected to be available at the branch offices of Danske Bank in Finland and at Helsinki Stock Exchange on 29 August 2014.

Background for the Offering

The strengthening of the Company's financial position is a key factor in Lemminkäinen's reviewed strategy, published on 30 July 2014. The strengthening of the Company's financial position supports the Company's target for profitable growth that it seeks by leveraging its strong position in infrastructure construction in Northern Europe and by focusing on selected customer segments and areas in building construction in Finland and Russia.

Lemminkäinen agreed on 21 May 2014 on measures to strengthen its balance sheet at the same time it agreed on amended terms for the three-year unsecured revolving credit facility of EUR 185 million, originally entered into in March 2013. As part of these measures, the Company agreed to strengthen its balance sheet with approximately EUR 100 million. The strengthening measures include continuing the disposals of non-core assets and operations and carrying out a share issue in autumn 2014.

The Company agreed in August 2014 on an amendment to the timetable regarding the balance sheet strengthening measures. The timetable was amended from the end of year 2014 to the end of the third quarter in 2015. As a result of the Offering and the amended timetable, the Company has, in its judgement, sufficient working capital for at least the next twelve months.

Subscription undertakings and underwriting

The Company has received from certain shareholders (each a "Subscription Guarantor”"and together the "Subscription Guarantors") an irrevocable commitment to subscribe for Offer Shares ("Subscription Undertaking") at the Subscription Price. The received Subscription Undertakings represent an aggregate of 61.9 per cent of the Offer Shares.

Danske Bank A/S, Helsinki Branch ("Danske Bank"), which acts as the Lead Manager of the Offering, has entered into an agreement with Lemminkäinen pursuant to which it has agreed, subject to certain conditions, to procure subscribers for any Offer Shares that may remain unsubscribed for in the Offering, excluding the Offer Shares that the Subscription Guarantors have irrevocably committed to subscribe for as set out above, or, failing which, to subscribe for such Offer Shares itself.
 

LEMMINKÄINEN CORPORATION

Corporate Communications

 

 

ADDITIONAL INFORMATION:

Ilkka Salonen, CFO

Tel. +358 2071 54518

Ilkka.salonen@lemminkainen.com

Katri Sundström, Head of Investor Relations

Tel. +358 2071 54813

katri.sundstrom@lemminkainen.com

 

DISTRIBUTION:
NASDAQ OMX Helsinki
Key media

www.lemminkainen.com

Together with our customers we create conditions that make living, working and travelling functional, safe and healthy. We operate in northern Europe and employ about 6,000 professionals. In 2013, our net sales were about EUR 2.0 billion. Lemminkäinen Corporation's share is quoted on NASDAQ OMX Nordic Exchange Helsinki. www.lemminkainen.com

DISCLAIMER

The information contained herein is not for publication or distribution, directly or indirectly, in or into Australia, Canada, the Hong Kong special administrative region of the People's Republic of China, Japan, New Zealand, South Africa, Singapore or the United States. The issue, exercise or sale of securities in the offering are subject to specific legal or regulatory restrictions in certain jurisdictions. The Company assumes 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 a 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 by the Company.

These written materials do not constitute an offer for sale of securities in the United States, nor may the securities 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 thereunder. There is no intention to register any portion of the offering in the United States or to conduct a public offering of securities in the United States.

The Company has not authorised 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 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 by any measure implementing the Prospectus Directive in that Relevant 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.

The information contained herein shall not constitute a public offering of shares in the United Kingdom. This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (iii) high net worth companies, 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 document relates will be only available to, and will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this announcement or any of its contents.

TERMS AND CONDITIONS OF THE OFFERING

Overview of the Offering

On 9 April 2014, the Annual General Meeting of shareholders of Lemminkäinen Corporation ("Lemminkäinen" or the "Company") authorized the Board of Directors of the Company to resolve on a share issue. The number of shares issued based on the authorization may not exceed 3,900,000 shares. The Board of Directors of the Company was authorized to resolve upon other terms and conditions of the share issue.

On 22 August 2014, the Board of Directors of the Company resolved, based on the authorization granted by the Annual General Meeting of shareholders of the Company, to issue a maximum of 3,569,724 new shares in the Company (the "Offer Shares") in the offering for consideration based on the pre-emptive subscription right of the shareholders (the "Offering") as set forth in these terms and conditions of the Offering.

As a result of the Offering, the total number of shares in the Company may increase from 19,650,176 existing shares (the "Existing Shares" and, together with the Offer Shares, the "Shares") to a maximum of 23,219,900 Shares. Assuming the Offering is fully subscribed for, the Offer Shares represent 18.2 per cent of the Existing Shares and related voting rights prior the Offering and 15.4 per cent of all Shares and related voting rights after the completion of the Offering.

Right to Subscribe for Offer Shares with Subscription Rights (Primary Subscription)

The Offer Shares will be offered for subscription to the shareholders of the Company in proportion to their shareholdings in the Company on the record date (the "Record Date") of the Offering. The Record Date of the Offering is 27 August 2014.

Each holder of the Existing Shares who is registered in the Company's shareholders' register maintained by Euroclear Finland Ltd (“"uroclear Finland") on the Record Date will automatically receive one (1) freely transferable subscription right in the form of a book-entry (the "Subscription Right") for each Existing Share owned on the Record Date. Eleven (11) Subscription Rights will entitle its holder to subscribe for two (2) Offer Shares. No fractions of the Offer Shares will be allotted and a Subscription Right cannot be exercised partially. The Subscription Rights will be registered on shareholders' book-entry accounts on 27 August 2014. No Subscription Rights will be allocated to the Shares held by the Company.

The Subscription Rights will be subject to public trading on NASDAQ OMX Helsinki Ltd (the "Helsinki Stock Exchange”" from 1 September 2014 to 10 September 2014.

If an Existing Share entitling to a Subscription Right is pledged or subject to any other restrictions, the Subscription Right may not necessarily be exercised without consent of the pledgee or holder of any other right.

Right to Subscribe for Offer Shares Unsubscribed for in the Primary Subscription without Subscription Rights (Secondary Subscription)

The Board of Directors of the Company will decide to offer the Offer Shares, which have not been subscribed for pursuant to the Subscription Rights, if any, in a secondary offering to shareholders of the Company and/or to other investors who have submitted a subscription assignment to subscribe for the Offer Shares without Subscription Rights and/or, if Offer Shares are not fully subscribed for thereafter, to subscribers procured by Danske Bank A/S, Helsinki Branch) (the "Lead Manager"), and/or, if Offer Shares are still not fully subscribed for, to the Lead Manager, in each case, subject to the terms and conditions of the Underwriting Agreement (as defined below). See also "–Subscription for Offer Shares without Subscription Rights in the Secondary Subscription and Allotment" below.

Subscription Guarantors and Underwriting

The Company has received from certain of its shareholders (each a "Subscription Guarantor" and together "Subscription Guarantors") an irrevocable commitment to subscribe for Offer Shares (each a “Subscription Undertaking” and together "Subscription Undertakings") at the Subscription Price. The received Subscription Undertakings represent an aggregate of 61.9 per cent of the Offer Shares in the Offering. The shareholders that have committed to the Subscription Undertaking are listed under "Agreements with the Lead Manager and Subscription Undertakings–Participation of the Existing Shareholders" in the Offering Circular.

The Lead Manager has entered into an agreement with the Company pursuant to which it has agreed, subject to certain conditions, to procure subscribers for any Offer Shares that may remain unsubscribed for in the Offering, excluding the Offer Shares that the Subscription Guarantors have irrevocably committed to subscribe for as set out above, or, failing which, to subscribe for such Offer Shares itself (the "Underwriting Agreement”). See Section “"greements with the Lead Manager and Subscription Undertakings–Underwriting Agreement" in the Offering Circular for more information on the Underwriting Agreement and the related terms and conditions.

Subscription Price

The subscription price is EUR 8.20 per Offer Share (the "Subscription Price"). The Subscription Price will be recorded in the reserve for invested unrestricted equity of the Company.

The Subscription Price corresponds to an implied discount, customary in rights issues, to the theoretical ex-rights price of approximately 35 percent, based on Lemminkäinen’s closing share price of EUR 13.45 on 21 August 2014 on the Helsinki Stock Exchange, i.e. the trading day immediately preceding the decision of the Company's Board of Directors on the Offering.

Subscription Period

The subscription period will commence on 1 September 2014 at 9.30 a.m. Finnish time and expire on 17 September 2014 at 4.30 p.m. Finnish time (the "Subscription Period").

The places of subscription will accept subscription assignments during their normal business hours. Places of subscription, book-entry account operators and custodians may request submission of a subscription assignment from their customers already at a certain date before the public trading with the Subscription Rights or the Subscription Period ends.

Places of Subscription

Subscription for Offer Shares may be effected at Danske Bank Oyj’s ("Danske Bank") branch offices and at Danske Bank Private Banking offices during their normal business hours, and the Danske Bank Investment Line by telephone with bank identifier codes from Monday to Friday from 9:00 a.m. to 8:00 p.m. Finnish time at +358 200 2000 (local network charges/mobile phone charges apply). A subscription assignment submitted through the Danske Bank Investment Line requires that the subscriber has a valid bank identifier code agreement with Danske Bank. The Danske Bank Investment Line calls are recorded.

In addition, subscription assignments may be submitted to the book-entry account operators and custodians who have entered into an authorized representative agreement with Danske Bank for the receipt of subscriptions.

Exercise of Subscription Rights in the Primary Subscription

A shareholder may participate in the Offering by subscribing for the Offer Shares by using the Subscription Rights on the shareholder's book-entry account and by paying the Subscription Price thereof. In order to participate in the Offering, a shareholder must give a subscription assignment in accordance with the instructions provided by the shareholder’s own book-entry account operator or custodian. If the shareholder's own book-entry account operator or custodian does not provide instructions in relation to the subscription, the shareholder should contact Danske Bank. The book-entry account customers of Euroclear Finland must submit their subscription assignment at a branch office of Danske Bank.

Holders of Subscription Rights purchased from the Helsinki Stock Exchange must submit their subscription assignments in accordance with the instructions given by their own book-entry account operator or custodian.

Shareholders and other investors participating in the Offering, whose Existing Shares or Subscription Rights are held through a nominee, must submit their subscription assignments in accordance with the instructions given by their nominee.

Subscription assignments must be submitted separately for each book-entry account.

Incomplete or erroneous subscription assignments may be rejected. A subscription assignment may be rejected, if the subscription payment is not made according to these terms and conditions or if such payment is incomplete. In these situations, the subscription payment will be refunded to the subscriber. No interest will be paid on the refunded amount.

Any exercise of the Subscription Rights is irrevocable and may not be modified or cancelled other than as set forth under "– Withdrawal of Subscriptions under Certain Circumstances" below.

Any unexercised Subscription Rights will expire without any compensation at the end of the Subscription Period 4.30 p.m. Finnish time on at 17 September 2014.

Subscription for Offer Shares without Subscription Rights in the Secondary Subscription and Allotment

Subscription for the Offer Shares without Subscription Rights must be effected by a shareholder and/or other investor by submitting a subscription assignment and simultaneously paying the Subscription Price in accordance with the instructions provided by his/her book-entry account operator, custodian, or in the case of nominee-registered holders, in accordance with the instructions provided by the nominee. A subscription assignment can also be submitted at the places of subscription set forth above.

If a shareholder and/or other investor does not receive instructions from his/her book-entry account operator, custodian or nominee or if a subscription assignment cannot be returned to his/her book-entry account operator, custodian or nominee, the subscription assignment can be made at any of Danske Bank's branch offices.

If several subscription assignments are submitted in relation to a single book-entry account, the assignments will be combined into one assignment per book-entry account. The subscription assignment and payment must be received by the shareholder's and/or investor’s book-entry account operator, custodian or nominee or, if the subscription assignment has been submitted to Danske Bank by Danske Bank, on 17 September 2014 at the latest or on an earlier date in accordance with the instructions by the book-entry account operator, custodian or nominee.

In the event that not all of the Offer Shares have been subscribed for pursuant to the exercise of the Subscription Rights, the Board of Directors of the Company shall determine the allocation of the Offer Shares subscribed for without Subscription Rights as follows:

• first, to those that subscribed for Offer Shares also pursuant to Subscription Rights. If the Offering is oversubscribed by such subscribers, the allocation among such subscribers will be determined per book-entry account in proportion to the number of Subscription Rights exercised by subscribers for subscription of Offer Shares and, where this is not possible, by drawing of lots;
• second, to those that have subscribed for Offer Shares without Subscription Rights only and, if the Offering is oversubscribed by such subscribers, the allocation among such subscribers will be determined per book-entry account in proportion to the number of Offer Shares which such subscribers have subscribed for and, where this is not possible, by drawing of lots; and
• third, to subscribers procured by the Lead Manager or, when such subscribers have not been procured, to the Lead Manager in accordance with, and subject to, the terms and conditions of the Underwriting Agreement. The subscription period with respect to the Lead Manager and/or to subscribers procured by the Lead Manager expires on 23 September 2014.

The Company will confirm the approval or rejection of subscriptions for Offer Shares without Subscription Rights to all investors that have given such subscription assignments for the subscription for Offer Shares without Subscription Rights.

If the allocation of Offer Shares subscribed for without Subscription Rights does not correspond to the amount of Offer Shares indicated in the subscription assignment, the Subscription Price paid for non-allocated Offer Shares will be refunded to the subscriber on or about 26 September 2014. No interest will be paid on the refunded amount.

Withdrawal of Subscriptions in Certain Circumstances

In the event that the prospectus related to the Offering (the "Offering Circular") is supplemented or amended due to an error or omission in the Offering Circular or due to material new information which, in each case, could be of material importance to investors, investors who have subscribed for the Offer Shares are entitled to withdraw their subscriptions in accordance with the Finnish Securities Markets Act (746/2012, as amended) within two (2) business days from the publication of the supplement or amendment to the Offering Circular. A withdrawal of a subscription may only be made in respect of all of the Offer Shares the shareholder has subscribed for. The withdrawal right may only be used if the investor has committed to subscribe or subscribed for the Offer Shares prior to the publication of the supplement or amendment to the Offering Circular and provided that the error, omission or material new information that has resulted in the supplement or amendment has become known prior to delivery of the Offer Shares to the investor and, for the Offer Shares subscribed for pursuant to the Subscription Rights, the time when trading with the interim shares representing the Offer Shares (the "Interim Shares") begins. The procedure regarding the withdrawal of the subscriptions will be announced together with any such supplement or amendment to the Offering Circular through a stock exchange release.

Public Trading of the Subscription Rights

Holders of Subscription Rights may sell their Subscription Rights on the market at any time during the public trading of the Subscription Rights. Public trading of the Subscription Rights on the Helsinki Stock Exchange commences on 1 September 2014 and expires on 10 September 2014. The price of the Subscription Rights on the Helsinki Stock Exchange will be determined in market trading. Subscription Rights may be sold or purchased by giving a sell or purchase assignment to one's own book-entry account operator or to any securities broker.

The ISIN code of the Subscription Rights is FI4000106174 and the trading symbol is LEM1SU0114.

Payment for the Subscriptions

The Subscription Price of the Offer Shares subscribed for in the Offering will be paid in full at the time of submission of the subscription assignment in accordance with the instructions given by the place of subscription, the book-entry account operator or the custodian.

A subscription will be deemed effected only after the arrival of the subscription assignment at the subscription place or relevant book-entry account operator or custodian and of the payment of the Subscription Price in full.

Approval of Subscriptions and Publication of the Results of the Offering

The Board of Directors of the Company will approve all subscriptions pursuant to the Subscription Rights made in accordance with these terms and conditions of the Offering and applicable laws and regulations on or about 23 September 2014 and will, in accordance with the allocation principles set out under "–Subscription for Offer Shares without Subscription Rights in the Secondary Subscription and Allotment" above, approve subscriptions without Subscription Rights made in accordance with these terms and conditions of the Offering and applicable laws and regulations. No confirmation letters of acceptance of primary subscriptions made pursuant to the Subscription Rights will be sent. However, confirmation letters of acceptance of secondary subscriptions will be sent.

The Company will publish the final results of the Offering with a stock exchange release on or about 23 September 2014.

Registration of the Offer Shares to the Book-entry Accounts and Trading of the Offer Shares

The Offer Shares subscribed for in the Offering will be issued in book-entry form in the book-entry securities system maintained by Euroclear Finland. The Offer Shares subscribed for pursuant to the exercise of the Subscription Rights will be recorded on the subscriber's book-entry account as Interim Shares representing the Offer Shares after the subscription has been effected. The ISIN code of the Interim Shares will be FI4000106182 and the trading symbol will be LEM1SN0114. The Interim Shares will be freely transferable and trading with the Interim Shares on the official list of the Helsinki Stock Exchange, as a separate share class, will commence on the first trading day following the expiration of the Subscription Period on or about 18 September 2014.

The Interim Shares will be combined with the Existing Shares (ISIN code FI0009900336 and trading symbol LEM1S) when the Offer Shares have been registered with the Finnish Trade Register. Such combination is expected to occur on or about 25 September 2014. The trading of the Offer Shares on the official list of the Helsinki Stock Exchange is expected to commence on or about 25 September 2014.

The Offer Shares subscribed for without Subscription Rights will be recorded as Shares on the subscriber’s book-entry account on or about 25 September 2014.

The Offer Shares are freely transferable.

Shareholder Rights

The Offer Shares will carry the right to receive dividends and other distributions of funds, if any, and other shareholder rights in the Company as of the registration of the Offer Shares with the Finnish Trade Register, which will occur on or about 25 September 2014.

The Offer Shares will rank pari passu with all Existing Shares as of the registration of the Offer Shares with the Finnish Trade Register. Each Offer Share entitles its holder to one vote at the General Meeting of shareholders of the Company.

Transfer Tax and Other Expenses

No transfer tax or service fee is payable on the subscription of the Offer Shares. Book-entry account operators, custodians and securities brokers, who exercise assignments regarding the Subscription Rights, may charge a brokerage fee for these assignments in accordance with their own price lists. Book-entry account operators and custodians also charge a fee for the maintenance of the book-entry account and the deposit of shares in accordance with their price list.

Information

The documents referred to in Chapter 5, Section 22 of the Finnish Companies Act (624/2006, as amended), are available for review at the Company’s website at www.lemminkainen.fi/osakeanti2014.

Applicable Law and Dispute Resolution

The Offering will be governed by the laws of Finland. Any disputes arising in connection with the Offering will be settled by the court of competent jurisdiction in Finland.

Other Issues

Other issues and practical matters relating to the Offering will be resolved by the Board of Directors of the Company.