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Hexagon Composites ASA: Contemplated private placement and intention to spin off and list Hexagon Purus

By August 24, 2020 7   min read  (1284 words)

August 24, 2020 |

hexagon purus

Hexagon Composites ASA (“Hexagon” or the “Company”) announces today that the Board of Directors has initiated a process with the intention to spin off and list Hexagon Purus (“e-mobility Business”) separately as an independent company (the “Spin Off”).

In preparation for the Spin Off, the Board of Directors has retained Carnegie AS and Skandinaviska Enskilda Banken AB (publ) as Joint Bookrunners (together the “Managers”) to advise on and effect an undocumented private placement to raise proceeds of up to NOK 800 million, representing approximately 8.5% of the outstanding capital of the Company at current share price levels. The private placement will be directed towards Norwegian and international investors after the close of Oslo Stock Exchange today (the “Private Placement”).

Hexagon Composites is today comprised of solutions across the clean fuels spectrum. Its business is organized into low emission gas mobility solutions (g-mobility) and zero emission hydrogen and battery electric mobility solutions (e-mobility).

The Private Placement will allow the e-mobility Business to be listed with the required capital to fund its initial development phase, as well as support general corporate purposes within g-mobility. The intention is that a portion of the shares in Hexagon Purus will be distributed to Hexagon’s shareholders in connection with a separate listing, with Hexagon retaining majority ownership after the distribution.

Hexagon plans to remain a significant long-term owner in Hexagon Purus to support and develop customer and shareholder value.

The Spin Off and listing

The Company considers the intended separation as an important step for strengthening both Hexagon’s g-mobility and e-mobility (Hexagon Purus) businesses. The Spin Off will unlock further value from an industrial and financial perspective by creating two focused companies, each with its own strategic agenda and investment story. The separation will also allow the two businesses to have individual strategies for future funding, capital allocation and dividend policy.

After the intended spin off, Hexagon will be a g-mobility-focused company with attractive profitability and an array of longer-term growth opportunities, targeting several initiatives to drive low-emission fuel adoption. In the global push for a decarbonized transport sector, g-mobility is in the fast lane, driven by new regulations and focused industry initiatives to reduce tailpipe pollutants and greenhouse gas emissions.

Hexagon Purus will be a pure-play hydrogen and battery electric e-mobility company attractively positioned to benefit from the tremendous growth that is expected in the e-mobility market, with the following key highlights:

  • In pole position to benefit from game changing market opportunities for hydrogen and battery electric solutions globally driven by the ongoing ESG push towards a zero emission society
  • Global leader in Type 4 cylinders, a key enabling technology for hydrogen mobility, set to accelerate growth in an addressable market that is expected to reach ~USD 7bn in 2030
  • Unique hydrogen and battery systems as well as electric drivetrain integration capabilities meeting OEM standards
  • Strong customer relationships –notable early successes with major OEMs in North America, Europe and Asia
  • Established manufacturing footprint with serial production and tier 1 supply capabilities
  • Positioned for significant growth with record-high activity and substantial expansion potential in China through announced partnership with CIMC ENRIC

“Decarbonization is high on the global agenda. Governments have launched ambitious plans to decarbonize; many industries face strict targets for reducing emissions and the renewable energy required to make green hydrogen is growing more plentiful. In this global push to decarbonize, we see unprecedented opportunities for hydrogen and battery electric solutions,” says Jon Erik Engeset, CEO Hexagon.

“Hexagon Purus’ extensive experience in Type 4 cylinder production, combined with its deep systems understanding, makes it well-prepared to meet the expected accelerated demand. Hexagon Purus is already playing a leading role in this shift toward a zero emission society,” continued Engeset.

“Our deep knowhow and long experience with e-mobility technologies, along with our successful track-record with customers, make Hexagon Purus well suited to capitalize on the strong momentum in the zero emission space. We are excited to embark on this journey – with the support of Hexagon – to accelerate the development of hydrogen and battery electric zero emission mobility solutions and further unlock the value of Hexagon Purus,” says Morten Holum, President Hexagon Purus.

The Spin Off is intended to be completed before year-end 2020, following the transfer of Hexagon Purus’ CNG LDV business to Hexagon’s g-mobility business (reference is made to the stock exchange release on 19 August 2020 announcing the transfer). A portion of the shares in Hexagon Purus is expected to be distributed to existing Hexagon shareholders as a part of the intended listing of Hexagon Purus, with Hexagon remaining the majority shareholder committed to supporting Hexagon Purus industrially on its continued growth journey. After the completion of the Spin Off, the intention is to apply for Hexagon Purus’ shares to be admitted for trade on the Merkur Market, a multilateral trading facility operated by the Oslo Stock Exchange.

For more information about Hexagon Purus, please see the attached presentation.

Carnegie AS and Skandinaviska Enskilda Banken AB (publ) have been mandated as financial advisers to support Hexagon and Hexagon Purus in this process.

The Private Placement

The price in the Private Placement will be determined through an accelerated book building process. The minimum application and allocation amount have been set to the NOK equivalent of EUR 100,000. The Company may however, at its sole discretion, allocate an amount below EUR 100,000 to the extent applicable exemptions from the prospectus requirement pursuant to applicable regulations, including the Norwegian Securities Trading Act and ancillary regulations, are available.

The book building period for the Private Placement opens today at 16:30 CET and closes on 25 August 2020 at 08:00 CET. The Managers and the Company may, however, at any time resolve to close or extend the book building period at their sole discretion and on short notice.

The new shares to be issued in connection with the Private Placement will be issued based on a Board authorization granted by the Company’s general meeting held 22 April 2020. The new shares allocated in the Private Placement are expected to be settled through a delivery versus payment transaction on a regular T+2 basis by delivery of existing and unencumbered shares in the Company that are already listed on the Oslo Stock Exchange pursuant to a share lending agreement between the Managers, the Company and Flakk Composites AS. The shares delivered to the subscribers are thus expected to be tradable upon delivery.

The Company has considered the Private Placement in light of the equal treatment obligations under the Norwegian Securities Trading Act and Oslo Børs’ Circular no. 2/2014. The Company is of the opinion that the waiver of the preferential rights inherent in a private placement is, taking into consideration the time, costs and expected terms of alternative methods of securing the desired funding, in the common interest of the shareholders of the Company.

For more information, please contact:

David Bandele, CFO, Hexagon Composites ASA
Telephone: +47 920 91 483 | [email protected]

Karen Romer, SVP Communications, Hexagon Composites AS
Telephone: +47 950 74 950 | [email protected]

About Hexagon Composites ASA
Hexagon delivers safe and innovative solutions for a cleaner energy future. Our solutions enable storage, transportation, and conversion to clean energy in a wide range of mobility, industrial and consumer applications, including light-, medium- and heavy-duty vehicles, ground storage, distribution, marine, rail and backup power solutions.

About Hexagon Purus
Hexagon Purus, a Hexagon Composites company, enables zero emission hydrogen and battery electric mobility for a cleaner energy future. Hexagon Purus is a world leading provider of Hydrogen Type 4 high-pressure cylinders, battery packs and vehicle systems integration for fuel cell electric and battery electric vehicles (FCEV and BEV) including hybrid mobility applications on light, medium and heavy-duty vehicles, transit buses, ground storage, distribution, marine, rail, aerospace and backup power solutions.

Learn more at www.hexagongroup.com and follow @HexagonASA on Twitter and LinkedIn.

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