Ixonos - Company Announcement

IXONOS’ SECURITIES NOTE APPROVED

Helsinki, Finland, 2013-11-14 17:33 CET (GLOBE NEWSWIRE) -- Ixonos Plc         
Stock Exchange Release           14 November 2013 at 18:30 




Not to be published in or distributed to the United States of America, Canada,
Australia, Hong Kong, South Africa or Japan 



The Finnish Financial Supervisory Authority has on 14 November 2013 approved
Ixonos Plc's (”Ixonos" or the ”Company”) securities note prepared pursuant to
the Finnish Securities Market Act (the ”Securities Note”) in relation to the
Company's rights issue announced on 11 November 2013 (the ”Rights Issue”). The
prospectus relating to the Rights Issue comprises of the Securities Note and
the registration document dated 17 January 2013 (the "Registration Document"
and, together with the Securities Note, the "Prospectus"). The Registration
Document contains information on the Company, its business and its financial
position, and the Securities Note contains information on the Rights Issue and
a summary of the information contained in the Registration Document and the
Securities Note. In addition, the Securities Note contains an update of certain
information contained in the Registration Document. 

The Securities Note is available during its validity as of 14 November 2013, at
the latest, on the Company's Web Page http://investor.fi.ixonos.com/ in digital
form and in printed form at the Company's headquarters, Ixonos Plc,
Hitsaajankatu 24, 00810 Helsinki, Finland and at the service center of NASDAQ
OMX Helsinki Ltd, Fabianinkatu 14, 00100 Helsinki during the Rights Issue. The
Registration Document has been available in digital form as of 21 January 2013.
The Prospectus is published and available only in the Finnish language. 



The Prospectus contains previously unpublished material information as follows:



Financial covenants, breach of covenants and waivers from the financiersconcerning immediate repayment of loans 



In relation to Ixonos' debt financing, no securities interests outside the
ordinary have been granted. The most important financial covenants agreed with
external financiers are to a certain extent the ratio between interest bearing
net debs as well as earnings before interest, taxes, depreciations and
amortizations (EBITDA). Depending on the financier and the calculation model,
the above-mentioned ratio shall be 3.0 or 2.5. In addition, part of the debt
financing contains a financial covenant according to which the Company's equity
ratio must not fall below 35%. The Company has on 30 June 2013 breached against
financial covenants in its loan agreements, but has received waivers from
financiers to exempt the Company from immediate payback of loans. The waivers
are valid until 31 December 2014. Due to the waiver period, the Company has
booked the relevant loans to current liabilities in the interim report for the
period ending on 30 September 2013. On 30 September 2013, the balance sheet
non-current liabilities include loans described above in the amount of EUR 7.2
million. The fulfillment of the financial covenants is examined twice a year,
on 30 June and 31 December. 

The Company finances its operations with cash flow from operations, with
borrowed capital or by increasing its equity related financing. The Company's
financial risk management is presented in the Company's financial statements
for 2012 in note “31. Financial Risk Management”. 



Working capital statement



The Company's present working capital as at the date of the Prospectus is not
sufficient for its needs during the next 12 months. The Company considers at
the date of the Prospectus that its working capital is sufficient for its needs
for approximately six months provided that the Rights Issue is completed with
minimum net proceeds of 5.0 MEUR and that the Company's s cash flow projections
for 2014 are fulfilled. 

The insufficiency of the Company's present working capital as at the date of
the Prospectus for its needs during the next 12 months depends on, inter alia,
the following: 



  -- a decrease in purchases by and change in strategy of the major customer as
     well as the decreased cash flow resulting therefrom
  -- a greater delay than expected in getting new major customers and the
     increased cash flow resulting therefrom
  -- generation of loss from a project to be implemented with an Asian customer
     and the delay in receipt of payments
  -- a heavy cost structure as compared to the volume of sales
  -- short maturity of financing, including its amortization
  -- costs relating to restructuring of the Company's activities

The Company has implemented and will implement a number of actions to secure
its financial position: 

  -- the Rights Issue, including receipt of related subscription commitments and
     an underwriting commitment
  -- The Company has on 8 October 2013 announced its plan to raise, in addition
     to the Rights Issue, up to EUR 3.5 million by issuing shares in a directed
     share Issue ("Directed Share Issue") or option rights or other special
     rights entitling to shares that are set out in Chapter 10, Section 1 of the
     Companies Act ("Options or Other Special Rights"). The Company continues
     its preparations concerning a Directed Share Issue and an issue of Options
     or Other Special Rights within the frames set by the Board authorization
     following the Rights Issue.
  -- The Company announced its new strategy on 22 October 2013. The Company has
     chosen as its focus areas customer segments where the mobile internet
     technology is seen as powerfully changing the earning logic of the focus
     customer group. The Company believes that its capabilities have significant
     growth potential in terms of sales within these segments.
  -- The Company has continued to adjust its costs and it will, if needed,
     decrease them further through, among other things, statutory
     employer-employee negotiations.  Also concerning fix costs the Company has
     implemented and will continue to implement adjustments in relation to,
     among other things, costs for premises. Results of cost savings initiatives
     that have already been initiated will through changes in the costs
     structure increase the profitability during the autumn of 2013 and during
     2014.
  -- Waivers concerning financial covenants in loans granted by the Company's
     financiers according to which waivers such loans are not terminated prior
     to 31 December 2014 as a result of breaches of covenants.
  -- The agreement with Turret Oy Ab ("Turret") concerning postponement of
     amortizations of loans under certain circumstances until 31 December 2014:
     In connection with the Rights Offering Turret has on 7 November 2013 given
     an undertaking according to which Turret will at the earliest on 31
     December 2014 require the Company to repay the short-terms loan granted by
     Turret in aggregate amount of EUR 3.5 million if the Rights Issue is
     completed by 20 December 2013 in a minimum net amount of EUR 4.5 million.
     Turret shall not set off the above-mentioned loans against the subscription
     price resulting from share subscriptions based on the subscription
     commitment and the underwriting commitment. According to the undertaking,
     Turret has the right, if requested by it, to convert such loans, partly or
     in their entirety, into share capital, a hybrid loan or another equity
     instrument pursuant to IFRS that is issued by Ixonos on arms' length terms.
     If the Rights Issue, the Directed Share Issue and the issue of Options or
     Other Special Rights (as defined below, together the "Issues") are
     completed prior to 31 December 2014 in a minimum amount of MEUR 5, has
     Turret the right to request that such loans, including interest, are repaid
     with the amount that the net amount of the Issues exceeds MEUR 5. The Board
     of Directors of the Company and the financiers being party to the Company's
     financing agreement have accepted the undertaking. If the Rights Issue is
     not completed by 20 December 2013 in a minimum net amount of EUR 4.5
     million, Turret may require that the loans are repaid in accordance with
     relevant loan agreements to the effect that 1 MEUR falls due on 30 November
     2013 and MEUR 2.5 falls due on 31 December 2013.



The Company considers at the date of the Prospectus that its working capital is
sufficient for its needs for approximately six months provided that the Rights
Issue is completed with minimum net proceeds of 5.0 MEUR and that the Company's
s cash flow projections for 2014 are fulfilled. 



If the effects of the above-mentioned actions are not fulfilled as planned,
this may result in loss of working capital, termination of finance agreements
and difficulties in continuing the Company's business operations during the
next six months. If the Rights Issue does not generate net proceeds in an
amount of 5.0 MEUR or if the Company's s cash flow projections for 2014 are not
fulfilled, the Company will probably lose its liquidity without additional
actions, nor will it under these circumstances be able to finance its planned
operations or repay its debt in accordance with the original payment terms. The
above-mentioned loss of liquidity may, at worst, result in the commencement of
liquidation, company reorganization or bankruptcy proceedings. 



If the above-mentioned conditions for sufficiency of the working capital for
the Company's needs for the next six months are not fulfilled, the deficiency
must be covered through other actions, such as (i) use of the Board
authorization for, inter alia, the Directed Share Issue and the issue of
Options or Other Special Rights, (ii) conversion of Turret's loans into equity
instruments as set out above, (iii) restructuring or reorganization of the
Company's operations, (iv) proceeds result from sales of the Company's
businesses or assets, (v) additional financing, (vi) restructuring of the
Company's financing or (vii) any combination of the above. 



The sufficiency of the working capital during the second half of 2014 requires
the materialization of the cash flow projections for 2014 at a higher level
than expected or restructuring of the financing taking, in particular, into
account the maximum amount of loans falling due on 31 December 2014 being MEUR
5.5, including loans by Turret in an amount of MEUR 3.5 and the expiration on
31 December 2014 of waivers by the financiers according to which the loans will
not be terminated based on breach of financial covenants. As a result of
insufficiency of working capital, the Company may lose its liquidity, nor will
it be able to finance its planned operations or repay its debt in accordance
with the original payment terms. The above-mentioned loss of liquidity may, at
worst, result in the commencement of liquidation, company reorganisation or
bankruptcy proceedings. 



If the above-mentioned conditions for sufficiency of the working capital for
the Company's needs for the second half of 2014 are not fulfilled, the
deficiency must be covered through other actions, such as (i) use of the Board
authorisation for, inter alia, the Directed Share Issue and the issue of
Options or Other Special Rights, (ii) conversion of Turret's loans into equity
instruments as set out above, (iii) restructuring or reorganisation of the
Company's operations, (iv) proceeds result from sales of the Company's
businesses or assets, (v) additional financing, (vi) restructuring of the
Company's financing or (vii) any combination of the above. 



Helsinki, 14 November 2013



IXONOS OYJ

The Board of Directors





Additional Information

Esa Harju, CEO and President, tel. +358 40 844 3367, esa.harju@ixonos.com

Teppo Talvinko, CFO, puh. +358 40 7153 660, teppo.talvinko@ixonos.com



Distribution:

NASDAQ OMX Helsinki

Main media





DISCLAIMER

The information contained herein is not for publication or distribution,
directly or indirectly, in or into the United States, Canada, Australia, Hong
Kong, South Africa or Japan. These written materials do not constitute an offer
of securities for sale in the United States, nor may the securities be offered
or sold in the United States absent registration or an exemption from
registration as provided in the U.S. Securities Act of 1933, as amended, and
the rules and regulations thereunder. The Company does not intend to register
any portion of the offering in the United States or to conduct a public
offering of securities in the United States. 



The issue, exercise and/or sale of securities in the offering are subject to
specific legal or regulatory restrictions in certain jurisdictions. The Company
and Pohjola Corporate Finance Oy assume no responsibility in the event there is
a violation by any person of such restrictions. 

The information contained herein shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of the securities
referred to herein in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration, exemption from registration or
qualification under the securities laws of any such jurisdiction. Investors
must neither accept any offer for, nor acquire, any securities to which this
document refers, unless they do so on the basis of the information contained in
the applicable prospectus published or offering circular distributed by the
Company. 



The Company has not authorized any offer to the public of securities in any
Member State of the European Economic Area other than Finland. With respect to
each Member State of the European Economic Area other than Finland and which
has implemented the Prospectus Directive (each, a “Relevant Member State”), no
action has been undertaken or will be undertaken to make an offer to the public
of securities requiring publication of a prospectus in any Relevant Member
State. As a result, the securities may only be offered in Relevant Member
States (a) to any legal entity which is a qualified investor as defined in the
Prospectus Directive; or (b) in any other circumstances falling within Article
3(2) of the Prospectus Directive. For the purposes of this paragraph, the
expression an “offer of securities to the public” means the communication in
any form and by any means of sufficient information on the terms of the offer
and the securities to be offered so as to enable an investor to decide to
exercise, purchase or subscribe the securities, as the same may be varied in
that Member State by any measure implementing the Prospectus Directive in that
Member State and the expression “Prospectus Directive” means Directive
2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive,
to the extent implemented in the Relevant Member State), and includes any
relevant implementing measure in the Relevant Member State and the expression
“2010 PD Amending Directive” means Directive 2010/73/EU. 



This communication is directed only at (i) persons who are outside the United
Kingdom or (ii) persons 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 (the “Order”) and (iii) high net
worth entities, and other persons to whom it may lawfully be communicated,
falling within Article 49(2) of the Order (all such persons together being
referred to as “relevant persons”). Any investment activity to which this
communication relates will only be available to and will only be engaged with,
relevant persons. Any person who is not a relevant person should not act or
rely on this document or any of its contents.

Attachments:

Ixonos_securites_note_approved.pdf