Feb 12, 2020

NRC Group ASA: Contemplated private placement

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART DIRECTLY OR INDIRECTLY, IN AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES DIRECTLY OR INDIRECTLY, IN AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED HEREIN.

Reference is made to the stock exchange announcements by NRC Group ASA ("NRC" or the "Company") earlier today in relation to the release of the Company’s fourth quarter 2019 results and the publication of the Capital Markets Day presentation to be presented tomorrow.

The Company has engaged Arctic Securities AS, DNB Markets, a part of DNB Bank ASA and Nordea Bank Abp as joint bookrunners (together the "Managers") to advise on and effect a contemplated private placement of shares with gross proceeds of up to NOK 700 million by issuing new ordinary shares in the Company (the “Private Placement”), each with a nominal value of NOK 1.00 (the “New Shares”). The Private Placement consists of two separate tranches; one tranche with up to 10,675,719 New Shares in the Company (“Tranche 1”) and a second tranche with up to the number of New Shares that corresponds to a total transaction size (both tranches) of up to NOK 700 million (“Tranche 2”).

The Company’s capital structure has been evaluated in light of a number of important factors, including; (i) required financial flexibility to execute on the new strategic plan, including the ability to consider bolt-on M&A opportunities; (ii) existing debt financing arrangements; (iii) financial flexibility with regard to working capital needs; and (iv) the long term ambition to have an NIBD/EBITDA-ratio below 2.5x. The net proceeds from the Private Placement will enhance the financial strength and flexibility of the Company, and will also be used for general corporate purposes.

The following primary insiders have committed to subscribe in the Private Placement:

  • VR-Yhtymä Oy, the Company’s largest shareholder, currently owning approximately 18.28% of the current share capital, has pre-subscribed for its pro rata share of the Private Placement.
  • Datum AS, represented on the board of directors and currently owning approximately 2.41% of the share capital, has committed to subscribe in the Private Placement pro rata to its current shareholding in the Company.
  • Henning Olsen, CEO in the Company, has committed to subscribe for NOK 500,000 in the Private Placement.

In addition, the Private Placement has obtained significant support from the existing shareholder base at a price of NOK 37.00 per share.

The Private Placement will be directed towards existing shareholders and other Norwegian and international investors in each case subject to an exemption from offer prospectus requirements and any other filing or registration requirements in the applicable jurisdictions and subject to other selling restrictions (except for the listing prospectus requirements set out below).

The subscription price in the Private Placement (the "Subscription Price") will be determined through an accelerated book-building process to be conducted by the Managers. The application period for the Private Placement will commence today, 12 February 2020 at 16:30 hours CET and is expected to close on 13 February 2020 at 08:00 hours CET. The Company, together with the Managers, reserves the right to at any time and in its sole discretion resolve to close or to extend the application period or to cancel the Private Placement in its entirety. The minimum application and allocation amount in the Private Placement has been set to the NOK equivalent of EUR 100,000. The Company may, at its sole discretion, allocate an amount below EUR 100,000 to the extent applicable exemptions from the prospectus requirement pursuant to the Norwegian Securities Trading Act and ancillary regulations are available.

Allocation of the New Shares will be determined at the end of the book-building process. The final allocation will be made at the Company's Board of Directors' (the "Board") sole discretion, where the Board will focus on criteria such as (but not limited to), timeliness of the application, price leadership, relative order size, sector knowledge, perceived investor quality, investment horizon and existing shareholding in the Company.

The completion of Tranche 1 is subject to approval by the Board pursuant to an authorisation given by the Company’s annual general meeting held on 8 May 2019. The completion of Tranche 2 is subject to the approval by an extraordinary general meeting in the Company (the “EGM”) to be called for shortly after the conditional allocation in the Private Placement. Existing shareholders being allocated shares in the Private Placement undertake to vote in favour of Tranche 2. Further to this, the completion of the Private Placement is conditional upon the New Shares having been fully paid and legally issued (together with the conditions for Tranche 1 and Tranche 2 referred to as the “Conditions”).

Settlement for Tranche 1 is expected to take place on or about 17 February 2020 (DVP, t+2) while settlement in Tranche 2 is expected to occur shortly after the EGM. The share capital increase pertaining to Tranche 1 of the Private Placement is expected to be registered by the Norwegian Register of Business Enterprises on or about 14 February 2020. The Managers will pre-pay the total subscription amount in Tranche 1 in order to facilitate delivery-vs-payment settlement, however, the allocated shares in Tranche 1 will not be delivered to, and tradable by, the relevant applicant before such registration has taken place. Tranche 2 will be settled by new shares issued following and conditional upon approval by an EGM in the Company to be held on or about 6 March 2020 (the “EGM”). The new shares delivered in Tranche 2 will be issued on a separate ISIN and will not be tradable on Oslo Børs until a listing prospectus has been approved by the Financial Supervisory Authority of Norway and published, expected in mid-March 2020.

Subject to successful completion of the Private Placement, the Board will consider to carry out a subsequent offering of new shares in the Company directed towards shareholders in the Company as of 12 February 2020 (as registered in the VPS 14 February 2020) who were not allocated shares in the Private Placement and who are not resident in a jurisdiction where such offering would be unlawful or, for jurisdictions other than Norway, would require any prospectus, filing, registration or similar action. Such shareholders will be granted non-transferable preferential rights to subscribe for, and, upon subscription, be allocated new shares. The subscription price in such subsequent offering will be the same as the subscription price in the Private Placement. Existing shareholders being allocated shares in the Private Placement undertake to vote in favour of the approval of issuance of shares in the subsequent offering at the EGM.

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 and is of the opinion that the waiver of the preferential rights inherent in a private placement is considered necessary in the interest of time and successful completion. Taking into consideration the time, costs and expected terms of alternative methods of the securing the desired funding, as well as the subsequent offering considered, the Board of Directors has concluded that the conclusion of the Private Placement on acceptable terms at this time is in the common interest of the shareholders of the Company.

For further information, please contact:

Dag Fladby, Chief Financial Officer, NRC Group ASA on tel: +47 90 89 19 35.

About NRC Group

NRC Group is the largest rail infrastructure entrepreneur in the Nordic region. NRC Group has experienced significant growth since its inception in 2011 and has regional offices throughout Norway, Sweden and Finland. The company is headquartered at Lysaker, nearby Oslo, in Norway. NRC Group is listed on the Oslo Stock Exchange under ticker "NRC". The company's chief executive officer is Henning Olsen.

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

www.nrcgroup.com

Important Notices

This document is not an offer to sell or a solicitation of offers to purchase or subscribe for shares. Copies of this document may not be sent to jurisdictions, or distributed in or sent from jurisdictions, in which this is barred or prohibited by law. The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy, in any jurisdiction in which such offer or solicitation would be unlawful absent registration, or an exemption from registration or qualification under the securities laws of any jurisdiction.

This document is not for publication or distribution in, directly or indirectly, Australia, Canada, Japan, the United States or any other jurisdiction in which such release, publication or distribution would be unlawful, and it does not constitute an offer or invitation to subscribe for or purchase any securities in such countries or in any other jurisdiction. In particular, the document and the information contained herein should not be distributed or otherwise transmitted into the United States or to publications with a general circulation in the United States of America.

This document is not an offer for sale of securities in the United States. Securities may not be offered or sold in the United States absent registration with the United States Securities and Exchange Commission or an exemption from registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”). The Company does not intend to register any part of the offering in the United States or to conduct a public offering in the United States of the shares to which this document relates.

The Managers are acting for the Company in connection with the Private Placement and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients or for providing advice in relation to the Private Placement or any transaction or arrangement referred to in this press release.

This announcement and any materials distributed in connection with this announcement may contain certain forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they reflect NRC's current expectations and assumptions as to future events and circumstances that may not prove accurate. A number of material factors could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.

This information is subject to a duty of disclosure pursuant to Section 5-12 of the Norwegian Securities Trading Act.

Contact us

Henning Olsen

Henning Olsen

CEO

+47 91 74 15 92

henning.olsen[at]nrcgroup.com