K-Fast

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES, AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND, SINGAPORE, SOUTH AFRICA, SOUTH KOREA OR ANY OTHER JURISDICTION WHERE SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. OTHER RESTRICTIONS ARE APPLICABLE, PLEASE REFER TO “DISCLAIMER” AT THE END OF THIS PRESS RELEASE.

K-Fast Holding AB (publ) (“K-Fastigheter” or the “Company”) has resolved to issue a total of 24,000,000 series B shares at a subscription price of SEK 13.80 per share, whereby the Company will raise proceeds of SEK 331.2 million before transaction costs. A part of the share issue, corresponding to approximately SEK 80.3 million of the issue proceeds before transaction costs, is conditional on the subsequent approval of an extraordinary general meeting. The subscription price has been determined based on an accelerated book-building procedure carried out by Nordea Bank Abp, filial i Sverige (“Nordea”) and Swedbank AB (publ) (“Swedbank”) as Joint Global Coordinators and Joint Bookrunners.

Resolutions on directed issue

The capital raise is carried out through two separate resolutions on share issues, partly as a directed issue of 18,180,000 series B shares, pursuant to the authorization to issue shares granted by the Annual General Meeting held on 15 May 2023, through an accelerated book-building procedure targeting Swedish and international institutional investors (”Tranche 1”), partly as a directed issue of 5,820,000 series B shares, subject to approval at an extraordinary general meeting of the Company, directed to Erik Selin Fastigheter AB (”Tranche 2”). The subscription price in both share issues amount to SEK 13.80 per share and has been determined through an accelerated book-building procedure carried out by Nordea and Swedbank.

The subscription price reflects, according to the assessment by the board of directors, market conditions and demand for the Company’s shares. In total, K-Fastigheter raises SEK 331.2 million before transaction costs.

The extraordinary general meeting to approve the share issue according to Tranche 2 is expected to be held around 24 October 2023. The principal shareholders Jakob Karlsson AB and Erik Selin Fastigheter AB, which together hold approximately 70 per cent. of the shares and approximately 79 per cent. of the votes in K-Fastigheter, have committed to vote for approval of the board of directors’ resolution to issue the shares pursuant to Tranche 2. The notice of the extraordinary general meeting will be published through a separate press release around 2 October 2023. Erik Selin Fastigheter AB is owned by Erik Selin, also chairman of the board of directors of K-Fastigheter. Since the directed issue pursuant to Tranche 2 is directed to a person who belongs to a category of related parties as stated in Chapter 16 of the Swedish Companies Act (SFS 2005:551), approval by the general meeting is required where at least nine tenths of both the votes cast and the shares represented at the meeting must approve the share issue.

Investors in the directed issue according to Tranche 1, include existing shareholders as well as new Swedish and international institutional investors, such as Capital SMALLCAP World Fund, Fjärde AP-fonden, Clearance Capital Limited and Länsförsäkringar Fonder.

The share issues according to Tranche 1 and Tranche 2 are part of creating the conditions for continued expansion through the acquisition of building rights and construction start of new projects. The net cash from the share issues are intended to, by strengthening the financial position, which initially includes reducing short-term loan financing, increase the capabilities to, and enable investments in, construction start of additional projects and acquisition of building rights.

The Company’s board of directors has made an overall assessment and carefully considered the possibility to raise capital through a rights issue with preferential right for the Company’s shareholders. The board of directors considers that the reasons for deviating from the shareholders’ preferential right are (i) that a rights issue would take a significantly longer time to complete and entail a higher risk for an adverse effect on the share price, particularly in light of the current market volatility and the challenging market conditions, (ii) to, as far as concerning Tranche 1, diversify and strengthen the Company’s shareholder base with institutional investors, and (iii) to carry out a directed share issue can be made at lower costs and with less complexity than a rights issue. Considering the above, the board of directors has made the assessment that a directed issue of series B shares with deviation from the shareholders’ preferential right is the most favourable alternative for K-Fastigheter to carry out the capital raise. 

In respect of the directed share issue pursuant to Tranche 2, Erik Selin, the Chairman of the board of directors, has neither participated in the resolution to issue the new shares nor in the resolution to allocate the shares. Erik Selin has not participated in the pricing of the offer within the accelerated book-building procedure which preceded the board of director’s resolution to issue the shares, and has only participated in the share issue in order for the Company to obtain sufficient subscription in the book-building procedures at the prevailing subscription price.

The share issues pursuant to Tranche 1 and Tranche 2, assuming that the share issue pursuant to Tranche 2 is approved at the extraordinary general meeting, will result in a dilution of approximately 10.0 per cent. of the number of shares and 7.3 per cent. of the votes in the Company (calculated as the number of newly issued shares divided by the total number of shares in the Company after the share issues). The number of shares in the Company following the share issues will increase by 24,000,000 shares. After the share issues, the total number of shares will amount to 239,331,168 shares, of which 22,500,000 series A shares and 216,831,168 series B shares. The number of votes in the Company increases by 24,000,000 votes, from 305,331,168 votes to 329,331,168 votes. The share capital increases by SEK 6,400,000, from SEK 57,421,644.80 to SEK 63,821,644.80.

The settlement date for Tranche 1 is estimated to be around 3 October 2023. The settlement date for Tranche 2 is estimated to be around 26 October 2023.

In connection with the share issues, the Company has agreed to a lock-up undertaking, with customary exceptions, on future share issues for a period of 90 calendar days after the settlement date of the share issues pursuant to Tranche 1.

Advisors

Nordea and Swedbank are Joint Global Coordinators and Joint Bookrunners in connection with the directed issues. Setterwalls Advokatbyrå is legal advisor to K-Fastigheter and Roschier Advokatbyrå is legal advisor to the Joint Global Coordinators and Joint Bookrunners in connection with the directed issues.

For more information, please contact:
Jacob Karlsson, CEO,
e-mail: jacob.karlsson@k-fastigheter.se, telephone: +46 (0)738-219 626

Martin Larsson, Deputy CEO/CFO
e-mail: martin.larsson@k-fastigheter.se, telephone: +46 (0)703-533 160

Johan Hammarqvist, Head of Investor Relations and Communications
e-mail: johan.hammarqvist@k-fastigheter.se, telephone: +46 (0)708-730 900
 

This disclosure contains information that K-Fast Holding AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the above contact persons, on 29 September 2023, 00:30 CEST

Forward-looking statements

THIS PRESS RELEASE INCLUDES FORWARD-LOOKING STATEMENTS. THESE STATEMENTS INVOLVE RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY, INCLUDING, BUT NOT LIMITED TO, WHETHER THE COMPANY WILL OFFER THE SHARES, THE ANTICIPATED CONDITIONS OF THE OFFERING, WHETHER THE COMPANY WILL BE ABLE TO CONSUMMATE THE OFFERING, THE FINAL TERMS OF THE OFFERING, THE SATISFACTION OF CUSTOMARY CLOSING CONDITIONS WITH RESPECT TO THE OFFERING OF THE SHARES, PREVAILING MARKET CONDITIONS, THE ANTICIPATED USE OF THE NET PROCEEDS OF THE OFFERING OF THE SHARESAND THE IMPACT OF GENERAL ECONOMIC, INDUSTRY OR POLITICAL CONDITIONS. FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY THE USE OF THE WORDS “MAY,” “WILL,” “EXPECT,” “INTEND,” AND OTHER SIMILAR EXPRESSIONS. THESE FORWARD- LOOKING STATEMENTS ARE BASED ON ESTIMATES AND ASSUMPTIONS BY THE COMPANY’S MANAGEMENT THAT, ALTHOUGH BELIEVED TO BE REASONABLE, ARE INHERENTLY UNCERTAIN AND SUBJECT TO A NUMBER OF RISKS. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE ANTICIPATED OR PREDICTED BY THE COMPANY’S FORWARD-LOOKING STATEMENTS. PROSPECTIVE INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF. ALL FORWARD-LOOKING STATEMENTS ARE QUALIFIED IN THEIR ENTIRETY BY THIS CAUTIONARY STATEMENT, AND THE COMPANY UNDERTAKES NO OBLIGATION TO REVISE OR UPDATE THIS PRESS RELEASE TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE HEREOF, EXCEPT AS REQUIRED BY APPLICABLE LAW.

Disclaimers

NO ACTION HAS BEEN TAKEN BY THE COMPANY, NORDEA OR SWEDBANK OR ANY OF THEIR RESPECTIVE AFFILIATES THAT WOULD PERMIT AN OFFERING OF THE SHARES OR POSSESSION OR DISTRIBUTION OF THIS PRESS RELEASE OR ANY OFFERING OR PUBLICITY MATERIAL RELATING TO THE SHARES IN ANY JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED. PERSONS INTO WHOSE POSSESSION THIS PRESS RELEASE COMES ARE REQUIRED BY THE COMPANY AND NORDEA AND SWEDBANK TO INFORM THEMSELVES ABOUT, AND TO OBSERVE, ANY SUCH RESTRICTIONS.

THIS PRESS RELEASE IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, ITS TERRITORIES OR ITS POSSESSIONS (COLLECTIVELY, THE “UNITED STATES”), AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND, SINGAPORE, SOUTH AFRICA, SOUTH KOREA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL. THIS PRESS RELEASE IS NOT AN OFFER TO SELL SECURITIES OR THE SOLICITATION OF ANY OFFER TO BUY SECURITIES, NOR SHALL THERE BE ANY OFFER OF SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SALE WOULD BE UNLAWFUL.

THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED, TAKEN UP, EXERCISED, RESOLD, RENOUNCED, TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN APPROVED, DISAPPROVED OR RECOMMENDED BY THE U.S. SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION IN THE UNITED STATES OR ANY OTHER U.S. REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE OFFERING OF THE SECURITIES REFERRED TO HEREIN. NO PUBLIC OFFERING OF SECURITIES IS BEING MADE IN THE UNITED STATES.

IN THE UNITED KINGDOM AND MEMBER STATES OF THE EUROPEAN ECONOMIC AREA (THE “EEA”), THIS PRESS RELEASE AND THE OFFERING WHEN MADE ARE ONLY ADDRESSED TO AND DIRECTED AT PERSONS WHO ARE “QUALIFIED INVESTORS” WITHIN THE MEANING OF THE PROSPECTUS REGULATION (“QUALIFIED INVESTORS”). FOR THESE PURPOSES, THE EXPRESSION "PROSPECTUS REGULATION" MEANS REGULATION (EU) 2017/1129 AND REGULATION (EU) 2017/1129 AS IT FORMS PART OF UNITED KINGDOM DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (THE “EUWA”).

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended (”MiFID II”); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the ”MiFID II Product Governance Requirements”), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any ”manufacturer” (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the shares in THE COMPANY have been subject to a product approval process, which has determined that such shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II (the “POSITIVE Target Market”); and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II. Notwithstanding the Target Market Assessment, Distributors should note that: the price of the shares in THE COMPANY may decline and investors could lose all or part of their investment; the shares in THE COMPANY ARE NOT ATTRIBUTED TO ANY guaranteed income and no capital protection. an investment in the shares OF THE COMPANY is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom (the “NEGATIVE Target Market”). The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the DIRECTED Issue. Furthermore, it is noted that, notwithstanding the Target Market Assessment, NORDEA AND SWEDBANK will only procure investors who meet the criteria of professional clients and eligible counterparties.

FOR THE AVOIDANCE OF DOUBT, THE TARGET MARKET ASSESSMENT DOES NOT CONSTITUTE: (A) AN ASSESSMENT OF SUITABILITY OR APPROPRIATENESS FOR THE PURPOSES OF MIFID II OR UK MIFIR; OR (B) A RECOMMENDATION TO ANY INVESTOR OR GROUP OF INVESTORS TO INVEST IN, OR PURCHASE, OR TAKE ANY OTHER ACTION WHATSOEVER WITH RESPECT TO THE SHARES.

EACH DISTRIBUTOR IS RESPONSIBLE FOR CONDUCTING ITS OWN TARGET MARKET ASSESSMENT IN REGARDS TO THE COMPANY’S SHARES AND DECIDING ON APPROPRIATE DISTRIBUTION CHANNELS.

IN THE UNITED KINGDOM, THIS PRESS RELEASE IS BEING DISTRIBUTED ONLY TO, AND IS DIRECTED ONLY AT, QUALIFIED INVESTORS (I) WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE “ORDER”) AND QUALIFIED INVESTORS FALLING WITHIN ARTICLE 49(2)(A) TO (D) OF THE ORDER, AND (II) TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS “RELEVANT PERSONS”). THIS PRESS RELEASE MUST NOT BE ACTED ON OR RELIED ON (I) IN THE UNITED KINGDOM, BY PERSONS WHO ARE NOT RELEVANT PERSONS, AND (II) IN ANY MEMBER STATE OF THE EEA, BY PERSONS WHO ARE NOT QUALIFIED INVESTORS.

This press release does nEITHER identify Nor suggest to identify risks (direct or indirect) that may be associated with an investment in the NEW SHARES. ANY DECISION TO ACQUIRE OR SUBSCRIBE FOR SHARES SHOULD BE MADE ONLY ON THE BASIS OF AN INDEPENDENT REVIEW BY A PROSPECTIVE INVESTOR OF THE COMPANY'S PUBLICLY AVAILABLE INFORMATION. NEITHER NORDEA, SWEDBANK NOR ANY OF THEIR RESPECTIVE AFFILIATES ASSUMES ANY LIABILITY ARISING FROM THE USE OF, OR MAKES ANY REPRESENTATIONS REGARDING THE ACCURACY OR COMPLETENESS OF, THIS PRESS RELEASE OR THE COMPANY'S PUBLICLY AVAILABLE INFORMATION.

This press release does not constitute an invitation to warrant, subscribe, or otherwise acquire or transfer any securities in any jurisdiction. This press release does not constitute a recommendation for any investors' decisions. Each investor or potential investor should conduct a self-examination, 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.

NORDEA AND SWEDBANK ARE ACTING ON BEHALF OF THE COMPANY AND NO ONE ELSE IN CONNECTION WITH THE DIRECTED ISSUE AND WILL NOT BE RESPONSIBLE TO ANY OTHER PERSON FOR PROVIDING THE PROTECTIONS AFFORDED TO CLIENTS OF NORDEA AND SWEDBANK OR FOR PROVIDING ADVICE IN RELATION TO THE DIRECTED ISSUE.

EACH OF THE COMPANY, NORDEA AND SWEDBANK AND THEIR RESPECTIVE AFFILIATES EXPRESSLY DISCLAIMS ANY OBLIGATION OR UNDERTAKING TO UPDATE, REVIEW OR REVISE ANY STATEMENT CONTAINED IN THIS PRESS RELEASE WHETHER AS A RESULT OF NEW INFORMATION, FUTURE DEVELOPMENTS OR OTHERWISE.

As a property company, K-Fastigheter’s objective is to add value for tenants by creating attractive homes with superior comfort. The Group’s operations encompass active property management, project development and proprietary construction operations. To enhance cost efficiency and cut construction times, K-Fastigheter has chosen to work with three concept buildings, developed in-house and constructed for proprietary management. K-Fastigheter provides some 4,000 homes in several locations in the Öresund region, in the province of Småland and in western Sweden, and is assessing new markets as production capacity increases. The Group’s property portfolio has a book value SEK 14,3 billion, with an annual rental value of about SEK 528 million. Since November 2019, the company’s Class B shares have been traded on Nasdaq Stockholm under the (ticker: KFAST B). Read more at k-fastigheter.com