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Convertible Debenture Programme 2015

Convertible Debenture 2015

On April 29, 2015, the Annual General Meeting resolved to adopt the Convertible Debenture Programme 2015 in accordance with the Board’s proposal. In the program, ÅF AB takes up a debenture loan at a nominal amount not exceeding SEK 200 000 000 through emitting convertible debentures. The subscription price for each debenture shall correspond to its nominal amount. In case the conversion rate at the time of issue should be set at a value that would bring a dilution after full conversion of more than 2 percent of the share capital and the votes, the maximum amount of the loan shall however be reduced by a lower subscription to bring the maximum dilution to 2 percent. The subscription price for each debenture shall correspond to its nominal amount.

The allocation of debentures shall be determined by the board within the following guidelines:

  • The CEO shall be entitled to subscribe to debentures to a nominal amount of SEK 2 000 000 and may as a maximum subscribe to SEK 6 000 000.
  • Members of the group management (10 persons) shall be guaranteed a subscription of SEK 1 000 000 each and may as a maximum subscribe to an amount of SEK 3 000 000 each.
  • Key staff (approx. 190 persons) shall all be guaranteed a subscription of a nominal amount of SEK 300 000 each and may subscribe up to SEK 900 000 each.

If the final total amount of the debenture loan is adjusted to avoid exceeding the maximum dilution, the allocated subscribed amounts shall be adjusted in proportion to this. In case of oversubscription employees shall in the first instance be granted the guaranteed allotment and then be allotted additional debentures with the same percentage regardless of category and in relation to their subscriptions in addition to the guaranteed amount (within the specified maximum amount for each category). When determining the number of convertibles in addition to the guaranteed allotment, only the desired subscription up to the specified maximum subscribed amount for each category shall be considered. The convertibles shall be subscribed for in multiples of SEK 50 000, rounded off to the closest whole number of convertible debentures. The lowest nominal amount to be subscribed for shall be SEK 50 000, rounded off to the closest whole number of convertible debentures.

Trading of the convertibles shall not be subject to restrictions.

Between 15 June 2018 and 15 March 2019 (inclusive), each convertible may be converted by the owner into a class B share at a conversion rate calculated at 120 percent of the average latest price paid for the Company’s class B share on the Nasdaq Stockholm exchange each day during the period 7-13 of May 2015 (inclusive), but not lower than SEK 10. Days without a noted price paid shall not be included in the calculation. The thus calculated conversion price shall be rounded off to the closest whole number of 10 öre (SEK 1/10), where 5 öre (SEK 1/20) shall be rounded off upwards. The conversion price shall be determined by the board immediately after the specified measurement period.

The convertibles are due for payment on 10 April 2019 if conversion has not taken place by then. The convertibles shall carry an interest to be determined considering inter alia the conversion price and the estimated market value of the convertibles when issued. The interest is paid in arrears on February 10 each year and on the maturity of the loan. Assuming an average share price of SEK 125 during the measurement period and a conversion price of SEK 150 and the current interest rate situation the interest will be approximately 1.5-2.4 percent per annum.

The debentures shall in case of the winding up or liquidation of the Company entitle to payment only after non subordinated debt and along (pari passu) with other subordinated debt not expressly subordinated to this loan.

Subscription for the convertibles shall take place from 25 May 2015 until and including 10 June 2015. The convertibles shall be issued at a price of 100 percent of the nominal value. Subscription is made at market price in accordance with valuation by EY, requested by the Board of the Company. For the evaluation EY has applied methods considered by market professionals as established for comparable securities.

The reason for deviating from the shareholders right to subscription is that the convertible debenture program constitutes a personal long term ownership among the employees, which is expected to promote the interest for the business and its results. It is therefore advantageous for the Company to be able to offer employees an opportunity to share in the development of the Group in a way that is also beneficial for the shareholders.

Dilution and influence on key figures

If all convertibles are assigned and the conversion rate is assumed to be SEK 150, which corresponds to 120 percent of SEK 125, on full conversion the share capital will increase by SEK 3 333 333 based on a quota value of SEK 2.50 per share. This corresponds to a dilution effect of approximately 1.7 percent on share capital and 1.2 percent of voting rights after full conversion.

In case the conversion rate at the time of issue should be set at a value that would bring a dilution after full conversion of more than 2 percent of the share capital and the votes, the maximum amount of the loan shall be reduced by a lower subscription to bring the maximum dilution to 2 percent (provided however that the maximum dilution may be larger than 2 percent due to a later recalculation of the conversion price as per Appendix 1).

The proposed convertible debentures cause the earnings per share to change in direct opposite proportion to the change in the number of shares a full conversion results in (the dilution). Since the dilution of the share capital under the terms and conditions can never exceed 2 percent, the earnings per share can never decrease by more than 2 percent at full conversion.

Authorisation for the Board to acquire the Company’s own shares and resolution to reduce the number of shares

The purpose of the acquisition the company’s own shares and to reduce the number of shares is that the Company shall be able to reduce the share capital corresponding to the number of shares which the subscribed debentures can be converted to.

The Annual General Meeting has for this reason granted the Board a mandate to, on one or more occasions before the next Annual General Meeting, make decisions to purchase the Company’s class B shares corresponding to a maximum of 2 percent of the total of shares in the Company. Buy-backs may be made only on the Nasdaq Stockholm exchange and only at a price within the current registered price range on the purchase date. The Board also proposes that the Annual General Meeting resolve that the Company’s share capital be reduced by the number of shares that may be acquired under the terms of the mandate given to the Board as described above for transfer to non-restricted reserves (non-restricted equity). The reduction shall be not less than SEK 0 and not more than SEK 3 929 431 (2% of the shares multiplied by the quota value of SEK 2.50).

According to the Swedish Companies Act the decision on reduction may only be executed after registration with and the approval from the Swedish Companies Registration Office (Sw: Bolagsverket).

Costs for the convertible debenture programme

The programme’s costs pertaining to fees to external advisors and banks are estimated to amount to less than SEK 1 000 000 during the course of the programme.

In the Board’s opinion the proposed convertible debentures will not entail any future costs except for employer’s contributions at the time of conversion to shares in certain countries (not Sweden).

Financing

One or two Swedish commercial banks will offer financing for the employees who subscribe to the convertible debenture programme. The financing will be at market terms.