GomSpace Group resolves on a rights issue of approximately SEK 298 million

Rights_issue.jpg
11/12/2018


GomSpace Group resolves on a rights issue of approximately SEK 298 million
On 28 September 2018, the board of directors of GomSpace Group AB (publ) (”GomSpace” or the “Company”) announced its intention, subject to an authorization subsequently received at the extraordinary general meeting held on 16 October 2018, to carry out a rights issue of approximately SEK 300 million with preferential rights for existing shareholders. GomSpace today announces, through this press release, that the board of directors has utilized the authorization and resolved on a rights issue with preferential rights for existing shareholders (the “Rights Issue”), including full terms.
The Rights Issue in brief:

·  Shareholders in GomSpace have preferential rights to subcribe for new shares in proportion to the number of shares held on the record date of participation (19 November 2018).
·  Each share held on the record date of participation entitles to one (1) subscription right. Each subscription right confers right to subscribe for one (1) new share.
·  The subscription price has been set to SEK 10.50 per new share. At full subscription, the total proceeds will amount to approximately SEK 298 million before deduction of transaction costs.
·  The subscription period runs from and including 21 November 2018 up to and including 5 December 2018.
·  The final day for trading in the Company’s shares including the right to participate in the Rights Issue with preferential right is 15 November 2018. The shares are traded without the right to participate in the Rights Issue with preferential right from and including 16 November 2018. Subscription rights will be traded on Nasdaq First North Premier from and including 21 November 2018 up to and including 3 December 2018.
·  The proceeds from the Rights Issue, after deduction of transaction costs, will mainly be used to finance and facilitate accelerated expansion and to ensure financial strength to pursue growth in the market.

Background and reasons

GomSpace, founded in 2007 and with operational headquarter in Denmark, is a global designer, integrator and manufacturer of high-end nanosatellites for customers within the academic, government and commercial markets. GomSpace is at the forefront of technological development, moving the boundaries for what has been regarded as possible to achieve with nanosatellite technology.

The strong growth since the IPO in June 2016, with a total growth of 211 percent (250 percent without elimination of transactions between group companies), has accelerated investments in production capacity, project management and product development. The opportunities for migrating space technology from high cost solutions to low cost solutions keep unfolding and the area where GomSpace has invested the most is in R&D. A series of new products are now being finalized and made ready for sale to customers, including advanced power solutions, improved radio payload technologies as well as new deployable solar panel structures. In parallel GomSpace has prepared for scaling up and industrializing the production. Significant scale benefits are expected to be achieved in the transition phase, moving from single satellite production, to industrialized assembly of larger quantities. With these new products and capabilities, the Company has a very strong platform for the next phase, increasing the commercial focus. The transition into the next phase also provides opportunities in optimising the organizational structure and reduce development costs. This is part of the recently communicated new five-year business plan taking GomSpace to positive cash flows. The Company has until today received more in orbit demonstration projects than expected. The future potential has thereby improved further as these projects could convert into significant constellation project orders in the medium term. In addition, the build-up of the dedicated Luxembourg based service operation (constellation management) is expected to grow quickly with a significant contribution to sales.

The strategy and business plan review, initiated by the board of directors, was conducted in order to fully grasp the underlying market potential and newly identified application areas and solutions for GomSpace’s products. The review resulted in the recently communicated new 5-year business plan, including an upward revision of the long-term ambitions for 2023 and a defined capital need until the Company is expected to be cash flow positive. The number of IOD customers the Company already has and the prospects GomSpace has identified, make GomSpace confident that the Company will achieve the new long term financial ambitions.

Following the review a rights issue was deemed by the board of directors as the most favorable solution for the shareholders. With the updated business plan and current outlook, the Company is expected to be fully financed with a SEK 298 million rights issue before transaction costs until the Company is expected to be cash flow positive. On that basis, the board of directors has now utilized its authorization and resolved on a Rights Issue of a total of SEK 298 million before transaction costs. Following a successful Rights Issue, GomSpace intends to terminate the SEK 300 million optional agreement with the European Select Growth Opportunities Fund entered into in July 2018.

Principal terms of the Rights Issue

Shareholders in GomSpace have preferential rights to subcribe for new shares in proportion to the number of shares held on the record date of participation (19 November 2018). Each share held on the record date of participation entitles to one (1) subscription right. Each subscription right confers right to subscribe for one (1) new share. The subscription price has been set to SEK 10.50 per new share. At full subscription, the total proceeds will be approximately SEK 298 million before deduction of transaction costs, by issuing no more than 28,340,667 new shares, resulting in an increase in the share capital of up to SEK 1,983,846.69. Following the Rights Issue, the number of outstanding shares in GomSpace will amount to no more than 56,681,334. The Rights Issue may thus entail a dilution of 50 percent. Shareholders not participating in the Rights Issue have the opportunity to obtain financial compensation for the dilution by selling their subscription rights.

If not all new shares are subscribed for by exercise of subscription rights in accordance with the shareholders’ preferential rights, the board of directors shall resolve on allocation of new shares subscribed for without subscription rights up to the maximum amount of the Rights Issue. In such case, priority will be given firstly to those who have also subscribed for new shares by exercise of subscription rights and secondly, to those who have applied to subscribe for new shares without subscription rights.  

Indicative timetable for the Rights Issue

+-------------+---------------------------------------------------------------+
|15 November |Last day of trading in GomSpace’s shares including the right to|
|2018 |participate in the Rights Issue with preferential right |
+-------------+---------------------------------------------------------------+
|16 November |First day of trading in GomSpace’s shares excluding the right |
|2018 |to participate in the Rights Issue with preferential right |
+-------------+---------------------------------------------------------------+
|19 November |Record date for the right to participate in the Rights Issue |
|2018 |with preferential right, in other words, shareholders who are |
| |registered in the share register kept by Euroclear Sweden AB on|
| |this day will receive subscription rights carrying the right to|
| |participate in the Rights Issue with preferential right |
+-------------+---------------------------------------------------------------+
|20 November |Expected date for publication of the prospectus |
|2018 | |
+-------------+---------------------------------------------------------------+
|21 November –|Trading in subscription rights |
|3 December | |
|2018 | |
+-------------+---------------------------------------------------------------+
|21 November –|Subscription period |
|5 December | |
|2018 | |
+-------------+---------------------------------------------------------------+
|7 December |Announcement of preliminary outcome of the Rights Issue |
|2018 | |
+-------------+---------------------------------------------------------------+
|Around 11 |Announcement of the final outcome of the Rights Issue |
|December 2018| |
+-------------+---------------------------------------------------------------+
|Around 20 |The Rights Issue is completed and registered |
|December 2018| |
+-------------+---------------------------------------------------------------+

Financial and legal advisers
Danske Bank is financial adviser and Setterwalls Advokatbyrå AB is legal adviser to GomSpace in relation to the Rights Issue.

For more information, please contact:
Niels Buus (CEO)
Tel: +45 40 31 55 57
Email: nbu@gomspace.com

About GomSpace Group AB
The Company’s business operations are mainly conducted through the wholly-owned Danish subsidiary, GomSpace A/S, with operational office in Aalborg, Denmark. GomSpace is a space company with a mission to be engaged in the global market for space systems and services by introducing new products, i.e. components, platforms and systems based on innovation within professional nanosatellites. The Company is listed on the Nasdaq First North Premier exchange under the ticker GOMX. FNCA Sweden AB is the Company’s Certified Adviser. For more information, please visit our website on www.gomspace.com.

This information is information that GomSpace 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 above, at 8:00 a.m CET on 12 November 2018.       

IMPORTANT INFORMATION      
This press release is not an offer or solicitation to acquire securities in GomSpace. A prospectus relating to the Rights Issue referred to in this press release will be filed with the Swedish Financial Supervisory Authority. After approval and registration of the prospectus by the Swedish Financial Supervisory Authority, the prospectus will be published and made available, inter alia, on GomSpace’s website.  

This press release does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein may not be sold in the United State absent registration or an exemption from registration under the US Securities Act of 1933, as amended. GomSpace does not intend to register any portion of the offering of the securities in the United States or to conduct a public offering of the securities in the United States. The information in this press release may not be announced, published or distributed, directly or indirectly, to the United States, Canada, Australia, Hong Kong, Japan, New Zealand, Singapore, South Africa, Switzerland or in any other jurisdiction where the announcement, publication or distribution of the information would not comply with applicable laws and regulations.
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