Arcam resolves on a preferential rights issue of approximately MSEK 986

The Board of Directors of Arcam Aktiebolag (publ) (“Arcam” or the “Company”) has, pursuant to the authorization granted by the annual general meeting on 16 June 2017, resolved on a new share issue of a maximum of 4,109,286 ordinary shares with preferential right for the Company’s existing shareholders (the “Rights Issue”). If the Rights Issue is fully subscribed, the Company will be provided with approximately MSEK 986 before deduction of transaction costs. The subscription price in the Rights Issue is SEK 240 per ordinary share.

Summary

  • The Company intends to use the proceeds from the Rights Issue to, amongst other things, cover the continued expansion of production capacity for metal powder at AP&C, cover an increased need of working capital to handle expansion in turnover, increase research and development of EBM and AP&C and increase EBM production capacity.
  • Shareholders receive one (1) subscription right for each ordinary share held as of the record date. Five (5) subscription rights entitles the holder to subscribe for one (1) new ordinary share in the Rights Issue.
  • The record date to participate in the Rights Issue is 19 October 2017.
  • Subscription in the Rights Issue may occur under the period as of 25 October 2017 up to and including 9 November 2017.
  • If the Rights Issue is fully subscribed, the Company will be provided with approximately MSEK 986 before deduction of transaction costs.
  • The subscription price in the Rights Issue is SEK 240 per ordinary share.
  • General Electric Company (through its wholly owned subsidiary GE Sweden Holdings AB) and other shareholders have undertaken to subscribe for their respective pro rata share of the Rights Issue corresponding to a total of 88.11 percent of the Rights Issue and have guaranteed the remaining portion of the Rights Issue. Consequently, the Rights Issue is fully guaranteed.

Background and rationale

The Board of Directors expects that Arcam’s investments will provide the Company with greater opportunities and the potential to continue to achieve favorable growth and profitability, but it will also result in greater risks if its increased costs are not offset by higher sales in the short term. To ensure that Arcam is able to carry out its growth plan, the Board of Directors has therefore decided to implement a Rights Issue which will provide the Company with approximately MSEK 986 before issue costs. The Rights Issue will enable the accelerated expansion and development of the Company, its addressable market and its products. The size of the Rights Issue is a further confirmation of Arcam’s ambition to make long-term investments in its technology and capacity, and will thus strengthen the Company’s credibility in the eyes of customers deciding whether or not to switch to Additive Manufacturing.

The proceeds are expected to be used as follows:

  • approximately MSEK 330 for the continued expansion of production capacity for metal powder at AP&C;
  • approximately MSEK 295 in working capital to handle expansion in turnover;
  • approximately MSEK 125 for increased research and development of EBM to stabilize technology and accelerate the next product generation;
  • approximately MSEK 125 for increased research and development of AP&C for enhanced plasma spheroidization and powder management;
  • approximately MSEK 110 for EBM to increase production capacity and for additional training and application facilities.

The Rights Issue

The Board of Directors of Arcam has today resolved on a rights issue of up to a maximum of approximately MSEK 986 with preferential right for the Company’s existing shareholders in proportion to their shareholdings as of the record date, 19 October 2017.

Arcam’s shareholders will have pre-emptive rights to subscribe for new ordinary shares in proportion to their holdings. For every ordinary share held on the record date, the holder will receive one (1) subscription right. Five (5) subscription rights entitle the holder to subscribe for one (1) new ordinary share. The subscription price is set at SEK 240 per share, which means that the Rights Issue will raise a maximum of approximately MSEK 986, before the costs for the Rights Issue, through the issuance of a maximum of 4,109,286 ordinary shares. The Rights Issue will result in an increase of the share capital of a maximum of approximately SEK 4,109,286. After the Rights Issue, the number of shares in Arcam will amount to a maximum of 24,855,871, of which 24,655,871 will comprise of ordinary shares and 200,000 will comprise of preference C shares, and the share capital will amount to a maximum of approximately SEK 24,855,873. For existing shareholders who do not participate in the Rights Issue, a dilution effect arises corresponding to 16.67 percent of the total number of ordinary shares and votes in the Company after the Rights Issue. Shareholders who choose not to participate in the rights issue may be able to compensate for this dilution by selling their subscription rights.

The record date at Euroclear Sweden AB, for participation in the Rights Issue is 19 October 2017. This means that the shares will trade excluding preferential right to participate in the Rights Issue from and including 18 October 2017. The subscription period runs from and including 25 October 2017 up to and including 9 November 2017, or such later date as decided by the Board of Directors.

If not all ordinary shares are subscribed for by the exercise of subscription rights (primary preferential right), the Board of Directors is to decide on the allotment of ordinary shares subscribed for without the exercise of subscription rights up to the maximum amount of the Rights Issue. Where, firstly, new ordinary shares that have not been subscribed for with primary preferential rights shall be allotted to the shareholders who on the record date 19 October 2017 are recorded as a shareholder in the share register kept by Euroclear Sweden AB, who have subscribed for and been allotted ordinary shares by exercising subscription rights and who, in addition, have notified their interest to subscribe for new ordinary shares without subscription rights (secondary preferential right). If new ordinary shares are still available after for allotment to those who have exercised the secondary preferential rights, the ordinary shares shall be allocated between the subscribers in relation to the total number of shares held by them in the Company on the record date, and where this is not possible, by drawing of lots. Secondly, if all ordinary shares have not been allocated according to the above, allotment of ordinary shares shall be made to those who have otherwise subscribed for and been allotted ordinary shares by exercising subscription rights and who, in addition, have notified their interest to subscribe for new ordinary shares without subscription rights and, in case of oversubscription, pro rata in proportion to the number of subscription rights used for subscription of ordinary shares, and if this is not possible, by drawing lots. Finally, allotment of the remaining ordinary shares shall be made to the guarantors of the issue, if any, in their capacity as guarantor and in accordance with their respective subscription and guarantee undertaking.

Subscription of shares by the exercise of subscription rights shall be made through simultaneous cash payment. Subscription of shares without the exercise of subscription rights shall be made on a separate subscription list and subscribed shares shall be paid in cash no later than two banking days after the notice of allotment has been sent to the subscriber, or such later date as the Board of Directors may decide. The new shares entitle to dividends for the first time on the first record date for dividend that take place after the Rights Issue has been registered with the Swedish Companies Registration Office and been recorded in the share register kept by Euroclear Sweden AB.

The complete terms and conditions for the Rights Issue, together with other information about the Company, will be presented in the prospectus that is expected to be published on the Company’s website on or around 24 October 2017.

Subscription undertakings and guarantees

General Electric Company (through its wholly owned subsidiary GE Sweden Holdings AB), with a shareholding corresponding to 76.89 percent of the Rights Issue, and other shareholders, with shareholdings corresponding to 11.22 percent of the Rights Issue, have undertaken to subscribe for their respective pro rata share of the Rights Issue and have also guaranteed the remaining portion of the Rights Issue. Consequently, the Rights Issue fully guaranteed. More information about the guarantors will be included in the prospectus for the Rights Issue, which is expected to be published on or about 24 October 2017.

Preliminary time table for the Rights Issue

October 9th, 2017 Resolution regarding the Rights Issue
October 17th, 2017 Last day of trading in the shares with the right to participate in the Rights Issue
October 18th, 2017 First day of trading in the shares without the right to participate in the Rights Issue
October 19th, 2017 Record date, i.e., shareholders registered in the register kept by Euroclear Sweden AB on this date will receive subscription rights carrying the right to participate in the Rights Issue
October 20th, 2017 Q3 2017 report is published
October 24th, 2017 Estimated date for publication of the prospectus
October 25th – November 7th 2017 Trading in subscription rights
October 25th – November 9th 2017 Subscription period
Around November 16th, 2017 The outcome of the Rights Issue is announced
Around November 27th, 2017 The Rights Issue is completed and registered

Advisers in connection with the Rights Issue

Söderlind & Co AB is financial advisor to Arcam and Baker McKenzie is legal advisor in connection with the Rights Issue.

This information is information that Arcam Aktiebolag (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out below on 10 October 2017, at 8.30 a.m. CET.

For further information:

Magnus René, CEO and President, Arcam
Cell: +46 702 79 89 99 or +1 781 266 6957
E-mail: magnus [dot] rene [at] arcam [dot] com