INSIDE INFORMATION: Duell Corporation announces the terms and conditions of its fully guaranteed rights offering of approximately EUR 20.2 million

30.11.2023 13:07:08 EET | Duell Oyj | Company Announcement

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The Board of Directors of Duell Corporation (“Duell” or the “Company”) has today resolved on the fully guaranteed rights offering of approximately EUR 20.2 million (the “Offering”). Certain shareholders of the Company, representing in aggregate 33.7 percent of the existing shares in the Company, have, each separately and irrevocably, given the Subscription Commitments (as defined below) regarding the Offering, in addition to which HC DL Holding Ltd (a wholly-owned subsidiary of Hartwall Capital Ltd) (“Hartwall Capital”) has given full Subscription Guarantee Undertaking (as defined below) for the remainder of the Offering, subject to certain conditions.

In the Offering, the Company will offer for subscription, based on pre-emptive rights for existing shareholders, a maximum of 1,008,000,642 new shares (the “Offer Shares”) based on the authorization granted by the Extraordinary General Meeting of the Company held on November 30, 2023. The Company aims to use the net proceeds received from the Offering to strengthen its balance sheet by repaying EUR 2.5 million of its debt according to the facilities agreement entered into with Nordea Bank Abp, to pay out the deferred purchase price relating to the acquisiton of Tran-Am Ltd (“TranAm”) (approximately GBP 4.9 million) during the first quarter of calendar year 2024, and to facilitate execution of the Company’s strategy aiming to expand the operations in Europe, to improve the position of online business and to develop brand portfolio.

The Board of Directors of the Company announces the terms and conditions of the Offering today.

Highlights of the Offering

• The Company aims to raise gross proceeds of approximately EUR 20.2 million by offering up to 1,008,000,642 Offer Shares for subscription in the Offering.
• The record date of the Offering is December 4, 2023 (the “Record Date”). Shareholders who are registered in Duell’s shareholders’ register maintained by Euroclear Finland Oy (“Euroclear Finland”) on the Record Date will receive one (1) subscription right in the form of a book-entry (the “Subscription Right”) for each existing Share of the Company (the “Existing Share”) owned by the shareholder on the Record Date.
• Each one (1) Subscription Right entitles its holder to subscribe for thirty-three (33) Offer Shares at the Subscription Price (as defined below) (the “Primary Subscription Right”).
• The subscription price is EUR 0.02 per Offer Share (the “Subscription Price”).
• The Subscription Price implies a customary discount for rights issues of approximately 32.4 percent compared to the theoretical ex-rights price based on the closing price of the Existing Shares on the Nasdaq First North Growth Market Finland maintained by Nasdaq Helsinki Ltd (the “First North Growth Market”) on the trading day immediately preceding the decision on the Offering (November 29, 2023).
• The first trading date of Duell’s shares without Subscription Rights is December 1, 2023.
• The subscription period will commence on December 7, 2023, at 9:30 a.m. (Finnish time) and end on December 21, 2023, at 4:30 p.m. (Finnish time) (the “Subscription Period”).
• Public trading of the Subscription Rights on the First North Growth Market is expected to commence on December 7, 2023, at 10:00 a.m. (Finnish time) and it ends on December 15, 2023, at 6:30 p.m. (Finnish time).
• Hartwall Capital, Sponsor Fund IV Ky (a fund managed by Sponsor Capital Oy) (“Sponsor Capital”) and certain companies controlled by persons involved in the operations of Sponsor Capital Oy, representing in aggregate 33.7 percent of the issued and outstanding Existing Shares, have each separately and irrevocably committed to subscribe for the pro rata amount of the Offer Shares based on the Subscription Rights allocated in the Offering, and to pay the Subscription Price for such Offer Shares (either by itself and/or on behalf of its controlled entity) under certain customary conditions (each separately a “Subscription Commitment” and together, the “Subscription Commitments”).
• Hartwall Capital has entered into an advance guarantee undertaking with Duell pursuant to which it has committed, subject to certain terms and conditions, to subscribe for the Offer Shares that may remain unsubscribed for in the Offering, up to a maximum of EUR 13.6 million, in addition to the Offer Shares that are covered by its Subscription Commitment (the “Subscription Guarantee Undertaking”).
• Carnegie Investment Bank AB, Finland Branch (”Carnegie”) is acting as the sole global coordinator and bookrunner for the Offering (the “Global Coordinator”).

Background of the Offering

The objective of the Offering is to strengthen Duell’s capital structure and to ensure its ability to implement its strategy in the current operating environment shaped by the high inflation, weakened customer demand and generally lower market activity following the Russian invasion of Ukraine. Following the aforementioned changes in the operating environment, Duell’s profitability has decreased and subsequently its net debt to adjusted EBITDA ratio has increased. The Offering is further aimed at facilitating the payment of the deferred purchase price relating to the acquisition of TranAm. Through the Offering, the Company seeks to strengthen its balance sheet and financial position in order to allow the Company to better manage its financial liabilities and to strengthen its profitability and cash flows. The objective of the Offering is also to enable further execution of the Company’s strategy, with the aim to expand the operations in Europe, to improve position of the online business and to develop brand portfolio.

To this end, approximately EUR 17.7 million in net proceeds is expected to be raised with the Offering, which would ensure Duell’s ability to operate in the changed operating environment and to implement its strategy.

Terms and conditions of the Offering in brief

The Record Date of the Offering is December 4, 2023. Shareholders who are registered in Duell’s shareholders’ register maintained by Euroclear Finland on the Record Date will receive one (1) Subscription Right in the form of a book-entry entitling them to subscribe for Offer Shares for each Existing Share of the Company owned by the shareholder on the Record Date. Each one (1) Subscription Right entitles its holder to subscribe for thirty-three (33) Offer Shares. The Subscription Rights will be registered on the shareholders’ book-entry accounts on December 5, 2023 in the book-entry system maintained by Euroclear Finland.

The Subscription Price is EUR 0.02 per Offer Share. The Subscription Price implies a customary discount for rights issues of approximately 32.4 percent compared to the theoretical ex-rights price based on the closing price of the Existing Shares on the First North Growth Market on the trading day immediately preceding the decision on the Offering (November 29, 2023). The Subscription Price shall be recorded into the Company’s reserve for invested unrestricted equity.

Both holders of Subscription Rights and investors who do not hold Subscription Rights may submit orders to subscribe for any Offer Shares that have not been subscribed for pursuant to the Primary Subscription Right (the “Secondary Subscription Right”). Offer Shares remaining unsubscribed under the Primary Subscription Right and the Secondary Subscription Right will be allocated in accordance with the Subscription Guarantee Undertaking. The Board of Directors of the Company will approve subscriptions pursuant to the Subscription Rights made in accordance with the terms and conditions of the Offering and applicable laws and regulations on or about December 29, 2023. In addition, the Board of Directors of the Company will, in accordance with the allocation principles set out in the terms and conditions of the Offering, approve subscriptions without Subscription Rights made in accordance with the terms and conditions of the Offering and applicable laws and regulations.

The shares are traded with the right to participate in the Offering up to and including November 30, 2023. The Subscription Period will commence on December 7, 2023, at 9:30 a.m. (Finnish time) and end on December 21, 2023, at 4:30 p.m. (Finnish time). The Board of Directors of the Company is entitled to extend the Subscription Period. Any extension will be announced by the Company through a company release no later than on December 29, 2023. Holders of the Subscription Rights may sell their Subscription Rights at any time during the public trading of the Subscription Rights. Public trading of the Subscription Rights on the First North Growth Market is expected to commence on December 7, 2023, at 10:00 a.m. (Finnish time) and it ends on December 15, 2023, at 6:30 p.m. (Finnish time). The price of the Subscription Rights on the First North Growth Market will be determined in market trading. The Offer Shares subscribed for pursuant to the exercise of the Subscription Rights will be recorded on the subscriber’s book-entry account as interim shares equivalent to the Offer Shares (the “Interim Shares”) after the subscription has been effected. The Interim Shares are freely transferable and trading with the Interim Shares on the First North Growth Market, as a separate class of securities, is expected to take place during the period from and including December 8, 2023, up to and including January 2, 2024. Any unexercised Subscription Rights will expire without any value at the end of the Subscription Period on December 21, 2023, at 4:30 p.m. (Finnish time).

Duell will publish the final results of the Offering through a company release on or about December 29, 2023.

Trading in the Offer Shares registered with Euroclear Finland commences on the First North Growth Market on or about January 3, 2024.

Subscription commitments and subscription guarantee undertaking

Hartwall Capital, Sponsor Capital and certain companies controlled by persons involved in the operations of Sponsor Capital Oy, representing in aggregate 33.7 percent of the issued and outstanding Existing Shares, have each separately and irrevocably committed to subscribe for the pro rata amount of the Offer Shares based on the Subscription Rights allocated in the Offering, and to pay the Subscription Price for such Offer Shares (either by itself and/or on behalf of its controlled entity) under certain customary conditions.

Hartwall Capital has entered into an advance guarantee undertaking with Duell pursuant to which it has committed, subject to certain terms and conditions, to subscribe for the Offer Shares that may remain unsubscribed for in the Offering, up to a maximum of EUR 13.6 million, in addition to the Offer Shares that are covered by its Subscription Commitment.

Indicative timetable of the Offering

Advisors

Carnegie is acting as the Global Coordinator and bookrunner for the Offering. White & Case LLP is acting as legal advisor to the Company in connection with the Offering. Roschier, Attorneys Ltd. is acting as legal advisor to the Global Coordinator in connection with the Offering. Miltton Ltd is acting as communications advisor to the Company.

Availability of documents

The Company has submitted a Finnish language prospectus (the “Prospectus”) for approval by the Finnish Financial Supervisory Authority. The Prospectus will be approved on or about December 5, 2023. The Prospectus and the English language translation of the Finnish Prospectus and the documents incorporated therein by reference (together, the “Offering Documents”) will be available at the latest on December 7, 2023 before the commencement of the Subscription Period at the Company’s website at investors.duell.eu.

The full terms and conditions of the Offering are attached to this release as Appendix 1.

Further information:

Pellervo Hämäläinen, Communications and IR Manager
Duell Corporation
+358 40 674 5257
pellervo.hamalainen@duell.eu

Certified advisor

Oaklins Merasco Oy

+358 9 612 9670

Duell Corporation (Duell) is an import and wholesale company based in Mustasaari, Finland, established in 1983. Duell imports, manufactures, and sells products through an extensive distribution network in Europe covering 8,500 dealers. The range of products includes 150,000 items under 550 brands. The assortment covers spare parts and accessories for motorcycling, bicycling, ATVs/UTVs, mopeds and scooters, snowmobiling, and boating. Logistics centres are in Finland, Sweden, Netherlands, France, and the UK. Duell’s net sales in 2023 was EUR 119 million and it employs over 200 people. Duell’s shares are listed on the First North Marketplace. www.duell.eu

Important Information

This release is not an offer for sale of securities in the United States. Securities may not be sold in the United States absent registration with the United States Securities and Exchange Commission or an exemption from registration under the U.S. Securities Act of 1933, as amended. Duell Corporation (the “Company”) does not intend to register any part of the share issue in the United States or to conduct a public offering of securities in the United States.

The distribution of this release may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such relevant legal restrictions. The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States, Australia, Canada, Hong Kong, Japan, New Zealand, Singapore or South Africa. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such aforementioned jurisdiction. This release is not directed to, and is not intended for distribution to or use by, any person or entity that is a citizen, resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would violate law or regulation or which would require any registration or licensing within such jurisdiction.

This release is only being distributed to and is only directed at: (i) persons who are outside the United Kingdom; (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (iii) high net worth companies, and other persons to whom it 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”). Any securities mentioned herein are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this release or any of its contents.

This release does not constitute a prospectus as defined in the Prospectus Regulation (EU) 2017/1129 and, as such, it does not constitute or form part of, and should not be construed as, an offer to sell, or a solicitation or invitation of any offer to buy, acquire or subscribe for, any securities or an inducement to enter into investment activity in relation to any securities.

No part of this release, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. The information contained in this release has not been independently verified. No representation, warranty or undertaking, expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. The Company or any of its respective affiliates, advisors or representatives or any other person, shall have no liability whatsoever (in negligence or otherwise) for any loss, however arising from any use of this release or its contents or otherwise arising in connection with this release. Each person must rely on their own examination and analysis of the Company, its subsidiaries, its securities and the transactions, including the merits and risks involved.

The Global Coordinator is acting exclusively for the Company and no one else in connection with the rights issue. It will not regard any other person as its respective client in relation to the rights issue. The Global Coordinator will not be responsible to anyone other than the Company for providing the duties afforded to its respective clients, nor for giving advice in relation to the rights issue or any transaction or arrangement referred to herein.

Forward-looking Statements

This release includes “forward-looking statements.” These statements may not be based on historical facts, but are statements about future expectations. When used in this release, the words “aims,” “anticipates,” “assumes,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “should,” “will,” “would” and similar expressions as they relate to the Company and the transaction identify certain of these forward-looking statements. Other forward-looking statements can be identified in the context in which the statements are made. These forward-looking statements are based on present plans, estimates, projections and expectations and are not guarantees of future performance. They are based on certain expectations, which, even though they seem to be reasonable at present, may turn out to be incorrect. Such forward-looking statements are based on assumptions and are subject to various risks and uncertainties. Readers should not rely on these forward-looking statements. Numerous factors may cause the actual results of operations or financial condition of the Company to differ materially from those expressed or implied in the forward-looking statements. The Company or any of its affiliates, advisors, representatives or any other person undertakes no obligation to review, confirm or to publicly release any revisions to any forward-looking statements to reflect events that occur or circumstances that arise following the date of this release.

Attachments

• Appendix - Terms and Conditions of the Offering, November 30, 2023.pdf