Glaston prepares share issues to strengthen balance sheet and financial position

Glaston Corporation will be holding an Extraordinary General Meeting of Shareholders on 12 February 2013 to authorize the Board of Directors to decide on one share issue or several share issues. The shares offered in the Share Issue and in the Conversion Issue total approximately 42.5% of the company’s shares and voting rights after the execution of the share issues, if the above mentioned maximum number of new shares is subscribed in the share issues.

The Board of Directors of the Glaston Corporation has convened the Extraordinary General Meeting of Shareholders to be held on 12 February 2013 to authorize the Board of Directors to decide on one share issue or several share issues. Shareholders representing not less than approximately 46% of the company’s shares, have committed themselves to voting in favour of the share issue authorization in the Extraordinary General Meeting of Shareholders. The maximum amount of the proposed authorization is 86 million shares, and relating to this authorization, the company is preparing two share issues, as described below in more detail.
One share issue is expected to be directed to the holders of the convertible bond issued in 2009 and debenture bond issued in 2011 (the Conversion issue). In this Conversion issue, the share subscription would be paid by the subscriber’s loan and interest receivables from the company. In the Conversion Issue, an approximate maximum of 38 million new shares are expected to be offered at the subscription price of EUR 0.30 per share. The Board of Directors has received conditional written commitments to subscribe for new shares in the Conversion Issue from Etera Mutual Pension Insurance Company, Yleisradion eläkesäätiö (Yleisradio Pension Fund) and a certain individual. The subscription commitments cover share subscriptions for an approximate total of EUR 11.4 million.
Furthermore, the company is planning a share issue directed to the public (the Share Issue). In the Share Issue, a maximum of 40 million new shares is expected to be offered at the subscription price of EUR 0.20 per share. The shareholders who have subscribed for shares in the Share Issue, will, in case of possible oversubscription, have allocation preference to the new shares in proportion to their current shareholding. The Board of Directors has received conditional written commitments to subscribe for new shares in the Share Issue from Varma Mutual Pension Insurance Company, Finnish Industry Investment Ltd., as well as from certain other investors and individuals belonging to the company’s management and certain members of the Board of Directors. The subscription commitments cover share subscriptions for an approximate total of EUR 8.3 million. The subscription commitments of the members of the Board of Directors and the individuals belonging to the management are EUR 1.3 million in total.
The shares offered in the Share Issue and in the Conversion Issue total approximately 42.5% of the company’s shares and voting rights after the execution of the share issues, if the above mentioned maximum number of new shares is subscribed in the share issues. The average subscription price of offered new shares in the Share Issue and in the Conversion Issue is then approximately EUR 0.25 per share. The subscription prices in the Share Issue and in the Conversion Issue are based on the trade volume weighted average quotation of the share on NASDAQ OMX Helsinki Ltd. during January 2013 and on the negotiations with those parties that have given subscription commitments. The Board of Directors is expected to decide and announce the terms and conditions of the share issues in more detail on or about at the end of February. The Board of Directors considers the execution of the Share Issue and the Conversion Issue necessary in order to ensure the company’s operation and financial position. The Share Issue and Conversion Issue are expected to be executed concurrently on or about the end of March.
In relation to the Total Arrangement Glaston announced the closing of the sale of Software Solutions Business Area on 4 February 2013. Furthermore, Glaston aims to sell its factory property complex located in Tampere, Finland by 31 March 2013. The execution of the sale of Tampere factory property complex reduces the company’s senior loans significantly.
In addition to the above measures, the company has agreed on the implementation of a new three-year credit facility with the company’s current lenders, if certain prerequisites, such as executions of the Share Issue and the Conversion Issue, are fulfilled. If the planned above-mentioned measures are executed, the Group’s financial position will strengthen significantly.
Alexander Corporate Finance Oy acts as the company’s advisor.
“The Total Arrangement will reduce the company’s net debt significantly and will increase the equity ratio to a good level. Strengthening of the financial position provides better opportunities for the business development of the company in the long term,” says Arto Metsänen, CEO & President of Glaston Corporation.