Hexicon secures bridge financing to the next phase – carries out directed issues of convertibles totaling SEK 82.5 million

The Board of Directors of Hexicon AB (publ) (“Hexicon” or the “Company”) has, with support of the full authorization granted by the annual general meeting on 12 May 2022, resolved to raise a SEK 81 million convertible loan from existing shareholders and new investors, including Wallenius Marine AB and Martin Bjäringer. The Board of Directors has also, subject to the subsequent approval of a general meeting since the persons entitled to subscription are encompassed by chapter 16 of the Swedish Companies Act (SFS 2005:551), resolved to raise a SEK 1.5 million convertible loan from the Company’s existing shareholders and board members Bjarne Borg (through Gulfstream Investment Group LCC) and Hans von Uthmann. Notice of an extraordinary general meeting will be published in a separate press release. The convertible loans of SEK 81 million and SEK 1.5 million, respectively, are collectively referred to as the “Convertible Loans”. The Convertible Loans will satisfy the Company’s financing need for the coming eight months, allowing Hexicon to divest selected project rights.

“Hexicon has recently completed its most investment heavy quarter yet, establishing a strategic portfolio according to plan, with the intention to enter the divestment phase during 2023. We have decided to accelerate the divestment of selected projects, enabling new investments. The Convertible Loans will enable us to reach key milestones within current projects, before divesting the attached project rights. I am pleased with the structure of the convertible loans which allows us to reach this next phase with significant revenue from project divestments, with limited dilution for the shareholders if converted”, says Marcus Thor, CEO at Hexicon.

Terms of the Convertible Loans
The total nominal value of the Convertible Loans amounts to SEK 82.5 million. The Convertible Loans have a 360 calendar days term to maturity from the issue date, that is up to and including 23 November 2023. The interest rate amounts to twelve (12.00) per cent per annum, which is capitalized until maturity or early repayment of the Convertible Loans.

Repayment of the Convertible Loans
For each 90-day period after the raising of the Convertible Loans, Hexicon can choose to repay the Convertible Loans plus a premium of 2.00 per cent of the nominal amount including accrued interest before maturity. The notice period for such early repayment is 30 calendar days. In the event of early repayment, the convertible holder has the right to choose shares in the Company instead of a cash payment.

At maturity the convertible holder can choose to have the loan repaid in cash or convert the loan into shares in Hexicon, meaning Hexicon has no right to convert the loan into shares.

Hexicon undertakes to use any proceeds from divestments of certain projects to repay the Convertible Loans.

Conversion price
The conversion price for the Convertible Loans shall be based on seventy-five (75) per cent of the volume-weighted average price (“VWAP”) of Hexicon’s shares during the 30 trading days preceding the conversion date on 9 November 2023 or preceding Hexicon’s earlier repayment. The conversion price shall be at least SEK 1.00 per share and at most SEK 2.50 per share.

Deviation from the shareholders’ preferential rights
The purpose of the new issues and the reason for the deviation from the shareholders’ preferential rights is that the Company has a strong need for additional working capital and due to the extended time period required to carry out a rights issue and the current market sentiment, it is the Board of Director's assessment that issues with deviation from the shareholder's preferential rights is in the Company's and all shareholder's interest and therefore also justifies deviation from the main rule that new issues shall be carried out with preferential rights for the shareholders. The Board of Directors’ assessment is that the terms and conditions of the issues is in accordance with market conditions, since they have been determined through a negotiation at arm's length between the Company and the investors. During the negotiations a comparison was made with terms and conditions in other issues of convertibles. Further, the Board of Directors has taken into account general market conditions that make it difficult to raise capital, whereby the terms and conditions for the Convertible Loans in an overall assessment are deemed to be in accordance with market conditions.

Share capital, shares, and dilution
Provided that the convertible issue to Bjarne Borg and Hans von Uthmann is approved by an extraordinary general meeting, and given that the Convertible Loans in their entirety is converted into shares including accrued interest and to the lowest possible conversion price of SEK 1.00, the number of shares in Hexicon will increase by *82,500,000, from 363,802,686 to 446,302,686. The share capital of the Company will increase by SEK 825,000.00, from SEK 3,638,026.86 to SEK 4,463,026.86. Thus, the Convertible Loans entails a potential maximum dilution of approximately 18.5 per cent based on the total number of shares in Hexicon after conversion of the Convertible Loans.*

*Updated information 22/02/2023

Pareto Securities AB acts as Sole Global Coordinator and Sole Bookrunner. Setterwalls Advokatbyrå AB acts as legal adviser to the Company in connection with the Convertible Loans. Erneholm Haskel AB acts as financial adviser to the Company.