(Oslo, Norway) Hexagon Purus ASA (“Hexagon Purus” or the “Company”) is announcing an investment by Mitsui & Co., Ltd. (“Mitsui”) of NOK 500 million and a Memorandum of Understanding (the “MoU”) for additional investments of up to NOK 1,500 million in the coming years, making Mitsui a long-term strategic partner and over time a significant minority shareholder in Hexagon Purus.
The Company is today launching a contemplated offering of i) convertible bonds (the “Convertible Bonds”) to raise gross proceeds of NOK 700-800 million (the “Convertible Bond Private Placement“) and ii) new shares in the Company (the “Offer Shares“) in a private placement to raise gross proceeds of approximately NOK 350-450 million (the “Equity Private Placement”, and together with the Convertible Bond Private Placement, the “Offering”).
The Company has engaged ABG Sundal Collier (“ABGSC”) and BNP PARIBAS (“BNP Paribas”) as joint managers and bookrunners on the Convertible Bond Private Placement and as financial advisers on the Mitsui strategic investment (jointly the “Managers”). The Company has also engaged ABGSC, Barclays Bank Ireland PLC (“Barclays”) and BNP Paribas as joint global coordinators and joint bookrunners in the Equity Private Placement (jointly the “Joint Global Coordinators”). With respect to Barclays, references herein to the Offering shall mean the Equity Private Placement only.
Mitsui has subscribed for, and will receive allocation of, NOK 500 million in the Convertible Bond Private Placement. In addition, Mitsui has entered into a deeper strategic alliance with the Company and has signed the MoU whereby Mitsui intends to participate as an anchor investor in future capital raises for the years to come and become a long-term significant minority shareholder in the Company. The non-binding MoU expresses the parties’ joint intentions and has a total monetary scope of up to NOK 2,000 million, including the NOK 500 million commitment in the Convertible Bond Private Placement. Future investments from Mitsui will be subject to, among other things, the Company’s fulfilment of commercial and operational milestones agreed between the parties in good faith.
The net proceeds from the Offering will be used to support the Company’s growth trajectory, including its ongoing global capacity expansion program and its financial targets for 2025, which were set out on the Company’s Capital Markets Day in 2022, and restated on 1 November 2022 during the Company’s interim report for the third quarter of 2022. In addition, the Offering will broaden the Company’s institutional investor base, while also serving as a platform for the contemplated up-listing to the main list of the Oslo Stock Exchange, which is currently expected to take place by the end of March 2023.
The Offering will be conducted through an accelerated bookbuilding process that will start today, 1 March 2023 at 16:30 (CET) and close on 2 March 2023 at 08:00 (CET). The Company, after consultation with the Managers and the Joint Global Coordinators, reserves the right, at any time and in its sole discretion, to close or extend the bookbuilding period for the Offering on short or no notice, as well as to amend the terms of the Offering.
The completion of the Convertible Bond Private Placement will not be conditional on completion of the Equity Private Placement and vice versa.
Strategic partnership with Mitsui
In conjunction with Mitsui’s investmen in the Convertible Bond Private Placement, the Company and Mitsui have signed a renewed and expanded strategic alliance agreement that brings the parties closer together as strtategic partners. The Company believes that there are significant business and value creation opportunities for both companies that can be captured through stronger and broader collaboration. As part of Mitsui’s investment and intention to be a long-term partner and significant minority shareholder in Hexagon Purus, the Company will propose to the general meeting that one representative from Mitsui is elected to the board of directors of Hexagon Purus (the “Board“).
“We are very proud and honored to finally announce our expanded strategic partnership with Mitsui and their long-term support to Hexagon Purus’ rapid growth journey. This agreement is an important step towards solidifying our position as a leading provider and enabler of zero-emission mobility globally. Mitsui’s in-depth knowledge and active role in the hydrogen space and their global presence will contribute to strengthening our offering, expand our global reach and cement our strategic position with our customers”, says Morten Holum, CEO of Hexagon Purus.
“We have been a strategic partner for the Hexagon group over the last seven years, and we are very pleased to extend our cooperation through actively supporting Hexagon Purus’ strategic development and in achieving their long-term growth targets. Mitsui is a firm believer in Hexagon Purus’ strong technology offering and its key role in enabling the transition to zero-emission mobility in the decades to come. We look forward to continuing leveraging the synergies between Hexagon Purus’ competitive zero-emission solutions and our vast global network”, says Hiroshi Kakiuchi, Managing Director, Chief Operating Officer of Performance Materials Business Unit at Mitsui.
Summary of key terms of the Convertible Bond Private Placement
The Company is contemplating a Convertible Bond Private Placement raising NOK 700-800 million in gross proceeds. Mitsui has pre-committed to subscribe for NOK 500 million and will receive full allocation for its commitment in the Convertible Bond Private Placement. The bookbuilding period for the Convertible Bond Private Placement will start today, 1 March 2023 at 16:30 (CET) and close on 2 March 2023 at 08:00 (CET). The Company, after consultation with the Managers, reserves the right, at any time and in its sole discretion, to close or extend the bookbuilding period on short or no notice.
The Convertible Bonds are structured as a 5-year senior unsecured convertible bond with a 6% fixed interest rate payable semi-annually in kind (i.e. through issuance of additional bonds). The conversion price is set at a 25% premium to the lowest of i) Equity Private Placement Offer Price (as defined below) and ii) the 5-days volume-weighted average price (VWAP) of the Company’s shares for the period to and including 1 March 2023 (the “Conversion Price”). The issuance of the Convertible Bonds are conditional upon the approval of an extraordinary general meeting (“EGM”) of the Company expected to be held on or about 16 March 2023. The Company’s largest shareholder, Hexagon Composites, has undertaken to vote in favour of the Convertible Bonds at the EGM.
The subscribers in the Convertible Bond Private Placement will receive 100 million non-transferrable warrants and 4.5 million non-transferrable additional warrants. All warrants will be issued irrespectively of whether the full amount of the Convertible Bonds are subscribed. The warrants will be allocated pro rata among the Convertible Bonds subscribers based on their Convertible Bonds allocation amount.
The warrants provide rights to subscribe, in context of any future equity financing round, for (i) common shares in the Company at the price determined by the Company in such equity financing, limited to the subscription amount for the Convertible Bond Private Placement initially allocated to such holder; and (ii) additional common shares in the Company limited to 3% of the number of shares allocated to them in any such equity financing round, at par value (currently NOK 0.1). All warrants expire five years after the date of the EGM.
The Company may redeem all but not only some of the outstanding Convertible Bonds (the “Call Option”) from and including the date falling 36 months after the Convertible Bond Private Placement at a price equal to 112% of the nominal amount for each redeemed bond (provided that the daily VWAP on each of at least 30 consecutive trading days ending not earlier than the trading day prior to the date of the Call Option notice, has exceeded 140% of the Conversion Price).
The Convertible Bonds can be converted into shares in the Company at any time at each convertible bondholder’s sole discretion.
Mitsui has agreed to undertake a 2-year lock-up on its Convertible Bonds (i.e. a transfer restriction, not a conversion restriction). Furthermore, Mitsui has agreed to a 180-day lock-up for shares received upon conversion prior to 3 years from the disbursement date of the Convertible Bonds, and a 90-day lock-up for shares received upon conversion after 3 years from the disbursement date of the Convertible Bonds.
Summary of key terms for the Equity Private Placement
The contemplated Equity Private Placement is expected to raise gross proceeds of NOK 350-450 million. The offer price in the Equity Private Placement (the “Equity Private Placement Offer Price”) is NOK 27.00 per Offer Share. The final number of Offer Shares will be determined by the Board, in consultation with the Joint Global Coordinators, following the bookbuilding process.
The bookbuilding period for the Equity Private Placement will start on 1 March 2023 at 16:30 (CET) and close on 2 March 2023 at 08:00 (CET). The Company, after consultation with the Joint Global Coordinators, reserves the right, at any time and in its sole discretion, to close or extend the bookbuilding period on short or no notice. If the bookbuilding period is shortened or extended, the other dates referred to herein may be changed accordingly.
Allocation of the Offer Shares in the Equity Private Placement will be determined at the close of the bookbuilding period, and the final allocation will be made by the Board at its sole discretion, following advice from the Joint Global Coordinators. The Company may focus on allocation criteria such as (but not limited to) pre-commitments/early indications, current ownership in the Company, timeliness of the application, price leadership, relative order size, sector knowledge, investment history, perceived investor quality, investment horizon and shareholder structure. The Board may, at its sole discretion, reject and/or reduce any orders, in whole or in part. The Board and the Joint Global Coordinators further reserve the right, at their sole discretion, to take into account the creditworthiness of any applicant. There is no guarantee that any applicant will be allocated Offer Shares. The Company intends to announce the Equity Private Placement Offer Price and the number of Offer Shares allocated in the Equity Private Placement through a stock exchange announcement expected to be published before opening of the trading on the Oslo Stock Exchange on 2 March 2023.
Settlement is expected to take place on or about 6 March 2023 on a delivery versus payment basis. Delivery versus payment settlement of the Offer Shares will be facilitated through the delivery of existing and unencumbered shares in the Company, that are already listed on Euronext Growth Oslo, being borrowed by ABGSC (on behalf of the Joint Global Coordinators) from Hexagon Composites ASA (“Hexagon Composites”) pursuant to a share lending agreement (the “Share Lending Agreement“) between the Joint Global Coordinators, Hexagon Composites and the Company. The Offer Shares will thus be tradable from allocation. The share loan will be settled with new shares in the Company (the “New Shares“) to be issued by a resolution of the Board pursuant to an authorisation granted by the annual general meeting held on 27 April 2022.
The Company’s largest shareholder, Hexagon Composites, will not participate in the Offering (or any Subsequent Offering). As Hexagon Composites has previously communicated, its strategy is to over time reduce their ownership in Hexagon Purus below 50%. Hexagon Composites will, however, continue as a meaningful and supporting shareholder, and has committed to a lock-up of 90 days on its shares in Hexagon Purus.
The Company has agreed to a lock-up of 90 days, subject to customary exceptions, including any Subsequent Offering (as defined below).
Completion of the Equity Private Placement is subject to i) the corporate resolutions of the Company required to implement the Equity Private Placement, including a resolution of the Board to proceed with the Equity Private Placement following the expiry of the bookbuilding period and to increase the share capital of the Company by the issuance of the New Shares and ii) the Share Lending Agreement remaining unmodified and in full force and effect.
Subject to, inter alia, completion of the Equity Private Placement, relevant corporate resolutions, including approval by the Board, prevailing market price of the Company’s shares and approval of a prospectus, the Board may consider carrying out a subsequent offering (the “Subsequent Offering“) of new shares at the same subscription price as the Equity Private Placement and otherwise in line with market practice. Shareholders who were allocated shares in the Equity Private Placement will not be eligible to participate in the Subsequent Offering. The Company reserves the right in its sole discretion to not conduct or to cancel the Subsequent Offering.
Additional key terms for the Offering
The Convertible Bond Private Placement and the Equity Private Placement will be directed towards selected Norwegian and international investors (a) outside the United States in reliance on Regulation S under the U.S, Securities Act of 1933, as amended (the “U.S. Securities Act“), and (b) to investors in the United States who are “qualified institutional buyers” (“QIBs“) as defined in Rule 144A under the U.S. Securities Act, in each case subject to an exemption being available from prospectus requirements and any other filing or registration requirements in the applicable jurisdictions and subject to other selling restrictions. The minimum application and allocation amount has in the Equity Private Placement been set to the NOK equivalent of EUR 100,000 per investor and in the Convertible Bond Private Placement been set to NOK 1,200,000 (but in no event less than the NOK equivalent of EUR 100,000). The Company may, however, at its sole discretion, allocate an amount below said thresholds to the extent applicable exemptions from the prospectus requirements pursuant to the Norwegian Securities Trading Act and ancillary regulations are available. Further selling restrictions and transaction terms will apply.
Equal treatment of shareholders
The Company has carefully considered the Equity Private Placement and issue of Convertible Bonds in light of the equal treatment obligations under the Norwegian Securities Trading Act and the rules on equal treatment under Euronext Growth Oslo Rule Book Part II and the Oslo Stock Exchange’s Guidelines on the rule of equal treatment. The Company has evaluated various forms of financing alternatives over a substantial period of time, with the joint interests of the shareholder community in mind. It is of the opinion that the deviation from the preferential rights inherent in carrying out the Offering in the manner proposed is firmly in the common interest of the shareholders of the Company.
Advisors
ABGSC and BNP Paribas are acting as joint managers and bookrunners on the Convertible Bond Private Placement and as financial advisers on the Mitsui strategic investment. ABGSC, Barclays and BNP Paribas are acting as joint global coordinators and joint bookrunners in the Equity Private Placement.
Advokatfirmaet Schjødt AS is acting as legal advisor to the Company.
Advokatfirmaet Thommessen AS is acting as legal advisor to the Managers and Joint Global Coordinators.
This information is considered to be inside information pursuant to the EU Market Abuse Regulation. This stock exchange announcement was published by Ingrid Aarsnes, VP IR & ESG at Hexagon Composites ASA, on 1 March 2023 at 16:35 CET.
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About Hexagon Purus
Hexagon Purus, a subsidiary of Hexagon Composites, enables zero emission mobility for a cleaner energy future. The Company is a provider of hydrogen Type 4 high-pressure cylinders and systems, battery systems and vehicle integration solutions for fuel cell electric and battery electric vehicles. Hexagon Purus’ products are used in a variety of applications including light, medium and heavy-duty vehicles, buses, ground storage, distribution, refueling, maritime, rail and aerospace.
Learn more at www.hexagonpurus.com (http://www.hexagonpurus.com) and follow @HexagonPurus on Twitter and LinkedIn.
About Mitsui & Co., Ltd.
Mitsui & Co., Ltd. (8031: JP) is a global trading and investment company with a diversified business portfolio that spans 63 countries in Asia, Europe, North, Central & South America, The Middle East, Africa and Oceania.
Mitsui has about 5,500 employees and deploys talent around the globe to identify, develop, and grow businesses in collaboration with a global network of trusted partners. Mitsui has built a strong and diverse core business portfolio covering the Mineral and Metal Resources, Energy, Machinery and Infrastructure, and Chemicals industries.
Leveraging its strengths, Mitsui has further diversified beyond its core profit pillars to create multifaceted value in new areas, including innovative Energy Solutions, Healthcare & Nutrition and through a strategic focus on high-growth Asian markets. This strategy aims to derive growth opportunities by harnessing some of the world’s main mega-trends: sustainability, health & wellness, digitalization and the growing power of the consumer.
Mitsui has a long heritage in Asia, where it has established a diverse and strategic portfolio of businesses and partners that gives it a strong differentiating edge, provides exceptional access for all global partners to the world’s fastest growing region and strengthens its international portfolio.
For more information on Mitsui & Co’s businesses visit, www.mitsui.com.
