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Nexam – surprisingly low discount in placement

NexamLogoNexam Chemical today announces that its private placement of 12 944 000 Nexam Chemical shares has been completed. The offering attracted interest from Swedish and international institutional investors. The price of SEK 10.00 per share was determined through a book-building procedure, resulting in total cash proceeds of approximately SEK 129 million before transaction costs.

We are very pleased with the strong interest from both Swedish and international investors and see positively on the new composition of shareholders. The offering strengthens our financial position and is an important step in financing the continued growth and expansion”, said Anders Spetz, CEO of Nexam Chemical.

For the purpose of the private placement, the Board of Directors of Nexam Chemical Holding AB has resolved, pursuant to the authorization given by the annual general meeting held on 12 May 2015, to issue 12 944 000 new Nexam Chemical shares to the investors in the private placement. The Board considers it to be beneficial for Nexam Chemical and its shareholders to broaden the shareholder base and to take advantage of the opportunity to raise capital for the company. The Board believes that the private placement, which in light of the above is made disapplying the shareholders’ pre-emptive rights, will promote the creation of value for all shareholders of Nexam Chemical.

Settlement with investors is expected to take place on or around 15 March 2016 and registration of new shares with the Swedish Companies Registration Office and Euroclear Sweden is expected to take place a few days thereafter.

The price in the private placement corresponds to a discount of approximately 5 per cent compared to the closing share price on 10 March 2016. The issue of new shares for the purpose of the private placement will, after registration of the new shares, result in a dilution of approximately 20 per cent. Through the issue of new shares, the number of shares in Nexam Chemical will increase by 12 944 000, from 51 780 000 shares to 64 724 000, and the share capital will increase by SEK 248 923,076929, from SEK 995 769,230794 to SEK 1 244 692,307723.

Obviously, a dilution of 20% is not insignificant. However, we believe the very low discount of only 5% indicates that there must be something bigger going on behind the scenes of Nexam. We would have preferred to get any news regarding new cooperations and/or larger commercial orders in combination with a new share issue. Given the strong interest from institutions, we believe that such news are just around the corner and management must have decided that it lets certain investors in already ahead. In any case, we think this placement was only the beginning of some eventful weeks ahead for Nexam.

Nordic Investor

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