Componenta - Company Announcement

Componenta strengthens its financial standing by discharging its secured debt and by issuing a convertible capital loan

Componenta Corporation Stock Exchange Release 29.4.2016 at 18.15

Componenta Corporation (the “Company”) has today agreed upon the discharge of
its secured debt. The agreement covers all of the Company’s secured bank loans.
In addition, the Company will agree upon the discharge of a secured bond. As a
result of the arrangement, the amount of the Company’s secured debt is
decreased by more than EUR 72 million and the Company’s equity increased by
approximately EUR 50 million. The arrangement in respect of the secured debt
and securing of the Company’s working capital is intended to be financed by
issuing a convertible capital loan in the maximum principal amount of EUR 40
million and by divesting the Company’s non-core business operations and assets. 

“By way of the financing arrangement to be consummated, Componenta is capable
of carrying out strategic measures to increase its profitability. We are going
to continue the divestment of the Company’s non-core business operations and
items, in addition to centralising the Company’s iron foundry productions to
fewer production lines than today. Additionally, the Company’s fixed costs will
be reduced further to secure the competitive strength of the Company. The
organic growth of Componenta will be restarted with the help of a new effective
management system and improving competitive strength,” says CEO Harri Suutari. 

The Board of Directors of the Company (the “Board”) has today resolved to offer
a convertible capital loan (the “Loan”) with related special rights, as
referred to in Chapter 10 Section 1 of the Companies Act, for subscription by a
limited number of selected investors (private placement), on the basis of the
authorisation given to the Board on 15 April 2016. 

There is a weighty financial reason for the Company to issue the special rights
because such special rights are issued with the intent to strengthen the
Company’s capital structure and for acquiring necessary financing in a
cost-effective way, considering the amount of subscriptions of the Loan. 

The total maximum amount of the Loan is EUR 40 million and the nominal amount
of each share of the Loan is EUR 1,000. The minimum subscription amount is EUR
60,000 and the issuing price of the Loan is 100 per cent. The subscription
price can be paid in money or, with the consent of the Board, by setting off
the subscription price against a loan receivable from the Company. The Loan is
a bullet loan and its maturity is four (4) years. The Company may not prepay
the Loan before its maturity date. The interest of the Loan is 2 per cent per
annum. 

The Loan is offered to selected investors for subscription from 2 May 2016 to 9
May 2016 by estimate. The Board will decide who is entitled to subscribe for
the shares of the Loan and the Board may also decide to cancel the issuing of
the Loan. The shares of the Loan may be assigned without restrictions. 

The Company has received Loan subscription undertakings in a total of EUR 33
million from the following persons: Ilmarinen Mutual Pension Insurance Company,
Elo Mutual Pension Insurance Company, Varma Mutual Pension Insurance Company,
Sampo plc, Finnish Industry Investment Ltd, Etra Capital Oy, Tiiviste-Group Oy,
Harri Suutari and Markku Honkasalo. 

The Loan can be converted into shares in the Company during the term of the
Loan. Each share of the Loan entitles its holder to 2,000 shares in the Company
and the subscription price of a share is EUR 0.50. The subscription price is
considered to be fair to all shareholders taking into account on one hand the
Company’s share price at the time of the Loan issuance and, on the other hand,
the need to secure the success of the Loan issuance. When using the conversion
right, the amount equivalent to the subscription price of the shares is set off
against the unpaid principal amount of the Loan. The subscription price of the
shares is recorded in its entirety in the invested unrestricted equity fund. As
a result of the subscriptions based on the shares of the Loan, the Company will
issue the maximum of 80 million new shares. 

The right to dividends and other shareholder’s rights will begin from the
registration of the shares. The Company can decide to apply for the public
trading of the Loan in Nasdaq Helsinki Oy. The loan is not guaranteed or
secured, and the terms and conditions of the Loan include other terms
characteristic to similar loans. Such terms relate e.g. to the acceleration of
the Loan in case of a change of control in the Company or delisting of the
Company, and to the noteholder’s rights when the Company decides to issue
shares or special rights and in case of the redemption of the Company’s shares
by the Company or its shareholder during the term of the Loan. 

The Board will resolve separately on the issuance of the Loan, based on made
and approved subscriptions. The agreement on the discharge of the secured debt
and the subscription undertakings are partly contingent on each other and in
addition to, inter alia, the satisfactory confirmation on the additional
financing of the Company’s Turkish subsidiary. 

The Company will announce the approval of the Loan subscriptions approximately
on 11 May 2016. The financing arrangement is estimated to be consummated by 31
May 2016 as a whole. Alexander Corporate Finance Oy acts as the Company’s
financial advisor and as arranger of the Loan, and Borenius Attorneys Ltd acts
as the Company’s legal advisor. 


Helsinki, 29 April 2016


COMPONENTA CORPORATION

Harri Suutari

President and CEO


For further information, please contact:

Harri Suutari
President and CEO
tel. +358 400 384 937

Markku Honkasalo
CFO
tel. +358 10 403 2710



Componenta is a metal sector company with international operations and
production plants located in Finland, Turkey, the Netherlands and Sweden. The
net sales of Componenta were EUR 495 million in 2015 and its share is listed on
Nasdaq Helsinki. The Group employs approx. 4,250 people. Componenta specializes
in supplying cast and machined components and total solutions made of them to
its global customers, who are manufacturers of vehicles, machines and
equipment.