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Hørsholm, Denmark, April 26th, 2023 - Bawat Water Technologies AB (”Bawat” or the “Company”) has received final approval from the Nordic Environment Finance Corporation (“Nefco”) regarding the Nefco-financing of SEK 25 million divided into two tranches and hence decides to carry out two directed share issues of a total of maximum 11,751,250 shares at a subscription price of SEK 1.60 per share, resulting in a total of SEK 18.8 million in issue proceeds, before transaction costs, in accordance with what was announced by the Company on April 17th, 2023. The First Directed Share Issue (as defined below) has been subscribed in full by the investors, in accordance with the previously announced subscription commitments.
The Nefco-financing
The Nefco-financing is intended, with the same terms that was announced on April 17th, 2023, to be disbursed in two tranches, with the first tranche consisting of a loan of approximately SEK 15 million (EUR 1.3 million) to be disbursed in the first half of 2023, and the second tranche consisting of a convertible loan of approximately SEK 10 million (EUR 1.0 million) to be disbursed in 2024. Since the Company has now received Final Approval from Nefco's board regarding the Nefco-Financing, this projects disbursement of funds from Nefco to Bawat in the end of the 2nd quarter 2023 provided that the loan agreement between Bawat and Nefco has been executed.
The Directed Share Issue
The terms of the Directed Share Issue
The Board of Directors of Bawat has resolved, with the support of an issue authorisation, on a directed share issue of 10,702,500 shares at a subscription price of SEK 1.60 per share to investors consisting of two family offices with thorough insight and knowledge in the shipping industry as anchor investors, a few other external investors and some existing larger shareholders, resulting in total issue proceeds of SEK 17,124,000 and an increase of the Company’s share capital with SEK 176,591.25 (the “First Directed Share Issue”) and will propose that the upcoming annual general meeting resolves on a directed share issue to Klaus Nyborg (chairman) and Marcus Hummer (CEO) of 1,048,750 shares at a subscription price of SEK 1.60 per share, resulting in total issue proceeds of SEK 1,678,000 and an increase of the Company’s share capital with SEK 17,304.38 (the “Second Directed Share Issue”). The First Directed Share Issue has been subscribed in full by the investors, in accordance with the previously announced subscription commitments. The Second Directed Share Issue will be subject to a resolution by the annual general meeting, which will, indicatively, be held on June 7, 2023, and will be convened in a separate notice, and, if resolved upon, will be subscribed by Klaus Nyborg and Marcus Hummer immediately thereafter. Such a resolution shall be valid only if it has been supported by shareholders representing at least nine-tenths of both the votes cast and the shares represented at the annual general meeting. Together, the First Directed Share Issue and the Second Directed Share Issue (together, the “Directed Share Issue”) may result in a total issue of 11,751,250 shares, an increase of the Company’s share capital by SEK 193,895.63 and total issue proceeds of SEK 18,802,000 before transaction costs.
A bridge loan of SEK 4.5 million from Selfinvest Aps and Klaus Nyborg is to be partly set off in the Directed Share Issue and partly repaid with proceeds from the Directed Share Issue and thus fully settled.
Dilution
The First Directed Share Issue corresponds to a dilution of approximately 21.3 percent of the current total number of outstanding shares and votes, and the Second Directed Share issue, provided that the annual general meeting resolves in accordance with the Board of Directors’ proposal, will result in an additional dilution of approximately 2.6 percent of the current total number of outstanding shares and votes. The Directed Share Issue corresponds to a total dilution of approximately 22.9 percent of the current total number of outstanding shares and votes and the total number of shares and votes in the Company will be 51,293,621 and the total share capital will be SEK 846,344.745 after the Directed Share Issue.
Deviation from the shareholders’ preferential rights and subscription price
The subscription price of SEK 1.60, which the subscribers in the First Directed Share Issue has subscribed shares for, and which
Klaus Nyborg and Marcus Hummer have committed to subscribe shares for, has been determined through a book building procedure. The subscription price corresponds to a discount of approximately 10 percent in relation to the volume-weighted average price on Nasdaq First North Growth Market during the 30 trading days preceding April 17th, 2023 and approximately 20 percent in relation to the volume-weighted average price on April 14th, 2023. It is the Board of Directors' assessment that the issue price is on market terms, such that it reflects the current market conditions and investor demand.
The Board of Directors is of the opinion that the proceeds from the Directed Share Issue would fulfill Nefco's requirement of matching Nefco-financing with equity which is seen as a favorable long-term financing for Bawat at market conditions and that the Directed Share Issue is positive for the Company's further development and to secure sufficient working capital need. The Board of Directors has also considered the possibility to raise the required equity through a rights issue. The Board of Directors has concluded that a rights issue would entail significantly longer execution time and thereby increased market risk exposure compared to a directed share issue. In addition, given the market volatility that has been observed during the beginning of 2023, and which is still ongoing, the Board of Directors has assessed that a rights issue would also require significant underwriting commitments from an underwriting syndicate, which would entail additional costs and/or additional dilution depending on the type of consideration paid for such underwriting commitments. Moreover, unlike a rights issue, the Directed Share Issue is expected to broaden the shareholder base and provide the Company with new reputable owners, which the Board of Directors believes will strengthen the liquidity of the shares and be beneficial to the Company. The Company's Board of Directors considers it of immense importance to have long-term and financially strong shareholders.
In light of the above, the Board of Directors has made the assessment that the Directed Share Issue with deviation from the shareholders' preferential rights is the most favorable alternative for Bawat and in the best interest of the Company's shareholders.
Advisors
Arctic Securities AS, filial Sverige is financial advisor to the Company in connection with the Directed Share Issue and the Nefco-financing. Advokatfirman Lindahl is legal advisor to the Company in connection with the Directed Share Issue.
For further information, please contact:
Marcus P. Hummer
CEO Bawat
+45 8870 8803
mph@bawat.com
www.bawat.com
This press release constitutes inside information that Bawat Water Technologies AB is obliged to make public pursuant to the EU Market Abuse Regulation 596/2014. The information was sent for publication, through the agency of the contact persons set out above, at the time stated by the Company's news distributor, Cision, at the publication of this press release.
About Bawat
The development of an entirely new approach to ballast water treatment utilizing onboard waste heat to treat ballast water led to the founding of Bawat in 2011. A ballast water treatment system avoids disposal of untreated water in seas and harbors.
Bawat's BWMS is a system that is simple, cost-effective, and sustainable, build on a zero environmental impact, using standard marine components. No filters, no chemicals no UV. And is the first to market a USCG/IMO Type Approval BWMS that uses pasteurization to treat ballast water in a one-pass process. Bawat has built upon its innovative breakthrough, and now offers ballast water solutions to the maritime industry in three categories:
- A ship BWMS for Retrofit and New Builds
- Mobile containerized solution for multiple vessel usage in a port, on a ship or for rigs
- Ballast Water as a Service for contingency services in ports
Bawat is an engineer-driven company that is rooted in the tradition of Danish maritime innovation and with a deep maritime insight: www.bawat.com.
Bawat is listed on Nasdaq First North Premier Growth Market
Certified Adviser:
Svensk Kapitalmarknadsgranskning AB
ca@skmg.se
Important information
The release, announcement or distribution of this press release may, in certain jurisdictions, be subject to restrictions according to law and the recipients of this press release in jurisdictions where this press release has been published or distributed should inform themselves of and follow such legal restrictions. The recipient of this press release is responsible for using this press release, and the information contained herein, in accordance with applicable rules in each jurisdiction. This press release does not constitute an offer to sell, or a solicitation of any offer, to acquire or subscribe for any securities in the Company in any jurisdiction, where such offer would be considered illegal or require registration or other measures.
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 States absent registration or an exemption from registration under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There is no intention to register any securities referred to herein in the United States or to make a public offering of the securities in the United States. The information in this press release may not be announced, published, copied, reproduced or distributed, directly or indirectly, in whole or in part, within or into the United States, Australia, Hong Kong, Japan, Canada, New Zealand, Switzerland, Singapore, South Africa or in any other jurisdiction where such announcement, publication or distribution of the information would not comply with applicable laws and regulations or where such actions are subject to legal restrictions or would require registration or other measures than what is required under Swedish law. Actions taken in violation of this instruction may constitute a crime against applicable securities laws and regulations.
This press release is not a prospectus as set forth in Regulation (EU) 2017/1129 (the "Prospectus Regulation") and has not been approved by any regulatory authority in any jurisdiction. The Company has not approved any securities offering to the public in any member state of the EEA and no prospectus has been published or will be published in connection with the Directed Share Issue. In each member state of the EEA, this message is only directed towards "qualified investors" in that member state in accordance with the definition in the Prospectus Regulation.
In the United Kingdom, this document and any other materials in relation to the securities described herein is only being distributed to, and is only directed at, and any investment or investment activity to which this document relates is available only to, and will be engaged in only with, "qualified investors" (according to the definition in article 86(7) of the British Financial Services and Markets Act 2000) who are (i) persons having professional experience in matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the British Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); or (ii) high net worth entities falling within Article 49(2)(a)-(d) of the Order (all such persons together being referred to as "relevant persons"). In the United Kingdom, any investment or investment activity to which this communication relates is available only to, and will be engaged in only with, relevant persons. Persons who are not relevant persons should not take any action on the basis of this press release and should not act or rely on it.
This press release does not identify, or purport to identify, the risks (direct or indirect) that may be associated with an investment in the Company's shares. Any investment decision to acquire or subscribe for new shares in the Directed Share Issue must be made on the basis of all publicly available information relating to the Company and the Company's shares. Such information has not been verified by the Arctic Securities AS, filial Sverige (the “Manager”). The Manager act for the Company in connection with the Directed Share Issue and no one else. The Manager will not be responsible to anyone other than the Company for providing the protections afforded to its clients nor for giving advice in relation to the Directed Share Issue or any other matter referred to herein.
This press release does not constitute a recommendation for any investors' decisions regarding the Directed Share Issue. Each investor or potential investor should conduct an examination on their own analysis and evaluation of the business and information described in this press release and any publicly available information. The price and value of the securities can decrease as well as increase. Achieved results do not provide guidance for future results. Neither the contents of the Company's website nor any other website accessible through hyperlinks on the Company's website are incorporated into or form part of this press release.
Failure to follow these instructions may result in a breach of the Securities Act or applicable laws in other jurisdictions.
Forward-looking statements
This press release contains forward-looking statements that reflect the Company's intentions, assessments, or expectations about the Company's future results, financial position, liquidity, performance, prospects, anticipated growth, strategies and opportunities and the markets in which the Company operates. Forward-looking statements are statements that do not relate to historical facts and may be identified by the inclusion of words such as "believe", "expect", "anticipate", "intend", "may", "plan", "estimate", "will", "should", "could", "aim" or "might", or, in each case, their negative, or similar expressions. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that the assumptions reflected in these forward-looking statements are reasonable, it cannot be guaranteed that they will materialize or prove to be correct. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements as a result of many factors. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The Company does not guarantee that the assumptions underlying the forward-looking statements in this press release are free from errors and readers of this press release should not place undue reliance on the forward-looking statements in this press release. The information, opinions and forward-looking statements that are expressly or implicitly contained herein speak only as of the date of this press release and are subject to change without notice. Neither the Company nor anyone else undertake to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this press release, unless this is required under law or Nasdaq First North Growth Market Rulebook for Issuers of Shares.