Klaveness Combination Carriers – LOI to acquire three CABU newbuilds and contemplated private placement
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Oslo, 23 May 2023: Klaveness Combination Carriers ASA (“KCC” or the “Company”) hereby announces that it has entered into a letter of intent to acquire three CABU III newbuilds (the “LOI”) and a contemplated private placement with gross proceeds of NOK equivalent of approximately USD 50 million (the "Private Placement") by issuing new shares (the "Offer Shares"). The final size of the Private Placement and the number of Offer Shares to be issued will be resolved by the Board of Directors of the Company (the “Board”) following a bookbuilding process, within the current authorisation granted by the Annual General Meeting on 25 April 2023 (the “Authorisation”). ABG Sundal Collier ASA, Clarksons Securities AS and DNB Markets, a part of DNB Bank ASA (“DNB Markets”) are acting as Joint Bookrunners (the “Joint Bookrunners”) in connection with the Private Placement.
The LOI to acquire three CABU III newbuilds
A subsidiary of KCC has entered into a LOI with Jiangsu New Yangzi Shipbuilding Co. Ltd. to acquire three CABU III newbuilds with expected delivery in the period Q1-Q3 2026. The contract price is USD 56.4 million per vessel and the estimated delivered cost including, amongst others, zero-emission readiness and costs for shipyard supervision team is approximately USD 60.5 million per vessel. Compared to the existing CABU I vessels built 2001-2002 that the CABU III newbuilds will replace, the vessels are estimated to have 25-30% higher earnings capacity and around 35% lower CO2 emissions due to increased cargo carrying capacity and substantially lower fuel consumption. The CABU III newbuilds are key for KCC to position the Company for expected growing caustic soda import volumes to Australia and for meeting its ambitious targets of an approximately 45% reduction in its carbon intensity within 2030 relative to its actual 2018 performance.
Please see the attached company presentation for further details.
The Private Placement
The net proceeds of the Private Placement will be used to partly fund the equity component of the delivered cost of three CABU newbuilds with expected delivery in Q1-Q3 2026. The Company will fund the remaining equity through cash on balance sheet and assumes securing approx. 60% debt prior to delivery.
The Private Placement will be directed towards Norwegian and international institutional investors, in each case subject to and in compliance with applicable exemptions from relevant prospectus or registration requirements.
The major shareholder, Rederiaksjeselskapet Torvald Klaveness, has pre-committed to subscribe for shares in the Private Placement corresponding to its pro-rata shareholding (approx. 53.76 per cent).
The subscription price and allocation of shares in the Private Placement will be determined through an accelerated bookbuilding process. The bookbuilding period commences today at 16:30 CEST on 23 May 2023. The bookbuilding may, at the discretion of the Company and the Joint Bookrunners, close earlier or later and may be cancelled at any time and consequently, the Company may refrain from completing the Private Placement. The Company will announce the final number of Offer Shares placed and the final subscription price in the Private Placement in a stock exchange announcement expected to be published before the opening of trading on the Oslo Stock Exchange tomorrow, 24 May 2023. Completion of the Private Placement is subject to final approval by the Board.
The minimum subscription and allocation amount in the Private Placement will be the NOK equivalent of EUR 100,000, provided that the Company may, at its sole discretion, allocate an amount below EUR 100,000 to the extent applicable exemptions from the prospectus requirement pursuant to applicable regulations, including the Norwegian Securities Trading Act and ancillary regulations, are available.
The allocation will be determined after the bookbuilding period and final allocation will be made at the Board’s sole discretion. Notification of allotment and payment instructions is expected to be issued to the applicants on or about 24 May 2023 through a notification to be issued by the Joint Bookrunners.
The Offer Shares allocated in the Private Placement are expected to be settled through a delivery versus payment transaction by delivery of existing and unencumbered shares in the Company that are already listed on Oslo Stock Exchange, pursuant to a share lending agreement between the Company, Rederiaksjeselskapet Torvald Klaveness and DNB Markets. The Offer Shares will thus be tradable from allocation. DNB Markets will settle the share loan with a corresponding number of new shares in the Company to be issued by the Board pursuant to the Authorisation.
Rederiaksjeselskapet Torvald Klaveness and the second largest shareholder EGD Shipping Invest AS have agreed with the Joint Bookrunners to a lock-up for a period of 90 days from the settlement date for the Private Placement, subject to customary exceptions. For any shares acquired as a result of exercise of existing warrants held by Rederiaksjeselskapet Torvald Klaveness and EGD Shipholding AS, the parent company of EGD Shipping Invest AS, the lock-up period is 30 days.
The contemplated Private Placement involves that the shareholders' preferential rights to subscribe for and being allocated the Offer Shares are set aside. The Board has considered the structure of the equity raise in light of the equal treatment obligations under the Norwegian Public Limited Companies Act, the rules on equal treatment under Euronext Oslo Rule Book Part II and the Oslo Stock Exchange's Guidelines on the rule of equal treatment. The Board is of the view that it is in the common interest of the Company and its shareholders to raise equity through a private placement. A private placement enables the Company to secure equity financing prior to signing the newbuild contract and committing to the investment in the three newbuilds. Further, a private placement will reduce execution and completion risk and allows for the Company to raise capital more quickly, which is particularly important in light of the newbuilds' payment structure, as well as the ability to utilize current market conditions, raise capital at a lower discount compared to a rights issue and without the underwriting commissions normally seen with rights offerings. Further, the Subsequent Offering, if implemented, will secure that eligible shareholders will receive the opportunity to subscribe for new shares at the same subscription price as that applied in the Private Placement.
On this basis the Board has considered the proposed transaction structure to be in the common interest of the Company and its shareholders.
The Company may, subject to completion of the Private Placement, consider conducting a subsequent share offering of new shares (the "Subsequent Offering"). If carried out, the size and structure of the Subsequent Offering shall be in line with market practice. Shareholders being allocated shares in the Private Placement will not be eligible to participate in a Subsequent Offering. The Company reserves the right in its sole discretion to not conduct or cancel the Subsequent Offering.
Advokatfirmaet Schjødt AS is acting as legal advisor to the Company in connection with the Private Placement.
For additional information, please contact:
Engebret Dahm, Chief Executive Officer
Email: eda@klaveness.com
Phone: +47 957 46 851
Liv Dyrnes, Chief Financial Officer
Email: lhd@klaveness.com
Phone: +47 976 60 561
About Klaveness Combination Carriers ASA
KCC is the world leader in combination carriers, owning and operating eight CABU and eight CLEANBU combination carriers. KCC’s combination carriers are built for transportation of both wet and dry bulk cargoes, being operated in trades where the vessels efficiently combine dry and wet cargoes with minimum ballast. Through their high utilization and efficiency, the vessels emit up to 40% less CO2 per transported ton compared to standard tanker and dry bulk vessels in current and targeted combination trading patterns.
Important Notices
This announcement is not and does not form a part of any offer to sell, or a solicitation of an offer to purchase, any securities of the Company. The distribution of this announcement and other information may be restricted by law in certain jurisdictions. Copies of this announcement are not being made and may not be distributed or sent into any jurisdiction in which such distribution would be unlawful or would require registration or other measures. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.
The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and accordingly may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and in accordance with applicable U.S. state securities laws. The Company does not intend to register any part of the offering or their securities in the United States or to conduct a public offering of securities in the United States. Any sale in the United States of the securities mentioned in this announcement will be made solely to "qualified institutional buyers" as defined in Rule 144A under the Securities Act.
In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The expression "Prospectus Regulation" means Regulation 2017/1129 as amended together with any applicable implementing measures in any Member State.
This communication is only being distributed to and is only directed at persons in the United Kingdom that are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or (ii) high net worth entities, and other persons to whom this announcement may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only for relevant persons and will be engaged in only with relevant persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.
Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "strategy", "intends", "estimate", "will", "may", "continue", "should" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control.
Actual events may differ significantly from any anticipated development due to a number of factors, including without limitation, changes in investment levels and need for the Company’s services, changes in the general economic, political and market conditions in the markets in which the Company operate, the Company’s ability to attract, retain and motivate qualified personnel, changes in the Company’s ability to engage in commercially acceptable acquisitions and strategic investments, and changes in laws and regulation and the potential impact of legal proceedings and actions. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The Company does not provide any guarantees that the assumptions underlying the forward-looking statements in this announcement are free from errors nor does it accept any responsibility for the future accuracy of the opinions expressed in this announcement or any obligation to update or revise the statements in this announcement to reflect subsequent events. You should not place undue reliance on the forward-looking statements in this document.
The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice. The Company does not undertake any obligation to review, update, confirm, or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this announcement.
Neither of the Joint Bookrunners nor any of their respective affiliates makes any representation as to the accuracy or completeness of this announcement and none of them accepts any responsibility for the contents of this announcement or any matters referred to herein.
This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities in the Company. Neither the Joint Bookrunners nor any of their respective affiliates accepts any liability arising from the use of this announcement.
This information is considered to be inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to section 5-12 the Norwegian Securities Trading Act.
This stock exchange announcement was published by Håkon Arne Moltubakk, Senior Manager Finance and IR at Klaveness Combination Carriers ASA on 23 May 2023 at 16:30 CEST on behalf of the Company.
