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2016-10-26

DNA Oy: DNA announces its intention to launch an initial public offering and listing on Nasdaq Helsinki Ltd

DNA OY PRESS RELEASE 26 OCTOBER 2016, 8.00 am EET

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO
THE UNITED STATES, AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND, SOUTH
AFRICA OR SINGAPORE
OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION
WOULD BE UNLAWFUL.
This document is an announcement and not a prospectus for the purposes of
applicable measures implementing EU Directive 2003/71/EC as amended (such
Directive, together with any applicable implementing measures of the relevant
Member State under such Directive, the "Prospectus Directive") and as such
does not constitute an offer to sell or the solicitation of an offer to
purchase securities. Investors should not subscribe for, or purchase, any
securities referred to in this document except on the basis of the
information in the prospectus, prepared pursuant to the Prospectus Directive,
in connection with the proposed listing of ordinary shares in the share
capital of the Company on Nasdaq Helsinki Ltd (the "Prospectus"), which will
be approved by the Finnish Financial Supervisory Authority and published in
due course.
DNA Oy ("DNA" or the "Company"), a Finnish full service telecommunications
operator,
today announces its intention to proceed with an initial public offering
("IPO") and a listing of its shares on the official list of Nasdaq Helsinki
Ltd (the "Helsinki Stock Exchange").

Jukka Leinonen, CEO of DNA:
"DNA has achieved a position as one of the leading telecommunications service
providers in Finland with fast and extensive networks, competitive services,
high customer satisfaction and a strong brand perception. Our main focus is
the customers and how well we manage to offer and create new solutions to
make their everyday life easier, more productive and entertaining.

I believe that our strong momentum in service revenue growth and operating
leverage as well as our largely completed investments in high-class networks
will continue to support our solid financial performance. The contemplated
IPO is an important milestone in our path of developing DNA to an even
stronger telecommunications company in the Finnish market. We are very happy
for the opportunity to widen our investor base."
Jarmo Leino, Chairman of DNA's Board of Directors:
"We are most delighted with the Company's strong performance in the past few
years. Management, together with the Company's highly motivated personnel,
has successfully and determinedly executed DNA's strategy. It is now an ideal
time to develop the ownership structure of the Company to support its future
development. We see a bright future ahead for DNA and the contemplated
listing would offer new shareholders an opportunity to become part of the
Company's success."
The Offering

The contemplated IPO is expected to consist of a secondary share sale by the
largest shareholders of the Company, Finda Oy and PHP Holding Oy, as well as
a number of smaller shareholders. In addition, the Company is considering a
primary equity offering of approximately EUR 50 million in connection with
the contemplated IPO, including a potential personnel offering. Shares are
expected to be offered to private individuals and entities in Finland,
permanent employees of DNA and institutional investors in Finland and
internationally. The Company, certain members of its management and certain
existing shareholders would be subject to customary lock-up arrangements in
connection with the IPO.

Danske Bank A/S, Helsinki branch and Morgan Stanley&Co. International Plc are
acting as joint global coordinators in the contemplated IPO, and J.P. Morgan
Securities plc, Nordea Bank Finland Plc and Skandinaviska Enskilda Banken Ab
(publ), Helsinki branch as joint bookrunners. Lazard&Co Ltd is the financial
advisor to the Company. Castrén&Snellman Attorneys Ltd and Skadden, Arps,
Slate, Meagher&Flom (UK) LLP are acting as legal advisers to the Company.
Borenius Attorneys Ltd and Shearman&Sterling (London) LLP are acting as legal
advisers to the joint global coordinators and joint bookrunners.

DNA highlights

* DNA operates in Finland, which is one of the most attractive
telecommunications markets in Europe, with three converged operators,
stable market dynamics and significant growth potential
* DNA has 26% market share in mobile communication services, 25% market share
in fixed broadband, 39% market share in cable TV and 15% market share in
the business-to-business telecom market
* DNA has a strong spectrum position and a well-invested mobile and fixed
network infrastructure, with over 99% 4G LTE population coverage in
mainland Finland by the end of 2016 and a hybrid-fiber coaxial network,
which is available in seven of the ten largest cities in Finland, allowing
gigabit grade speeds in the Helsinki metropolitan area and Oulu
* Strong momentum allows DNA to drive revenue from mobile communications and
fixed broadband, capturing 110,000 new mobile subscriptions in the mobile
market during January-September 2016, whilst continuing to enjoy a market
leading position in cable TV
* Significant revenue and EBITDA growth to date driven primarily by growth in
sales of mobile services, supported by a consistently growing mobile
subscription base combined with increased billing per subscriber
* Customer satisfaction, employee satisfaction and brand preference at high
levels providing a good foundation for continued growth
* Attractive cash flow growth opportunity supported by major upsell and
cross-sell potential in mobile and broadband services, a significantly
strengthened position in B2B through the acquisition of TDC, continued cost
and capital expenditure control and operational efficiency initiatives
* DNA's senior management team has decades of combined experience in the
telecommunications services and equipment sectors and a proven track record
of delivering growth at DNA

DNA's dividend policy, financial targets and future outlook

The Board of Directors of the Company has adopted a dividend policy pursuant
to which the Company targets a dividend payout ratio of approximately 70 to
90 percent of DNA's annual free cash flow to equity[1], while taking other
factors such as DNA's capital structure, future revenue, profits, financial
condition, general economic and business conditions and future prospects into
consideration.

In addition, the Board of Directors of the Company has made a conditional
decision that it will propose to the annual general meeting of the Company to
be held in 2017 that a total dividend of approximately EUR 70 million is paid
out for the financial year 2016, provided the Company's financial standing
permits such distribution. A final decision on the dividend payment will be
made at the annual general meeting.
DNA's has set the following mid-term financial targets:

* Revenue growth faster than average market growth;
* EBITDA margin of at least 30 per cent;
* Operative capital expenditure less than 15 per cent of net sales (excluding
potential fees for spectrum licenses);
* Net debt to EBITDA less than 2.0x, which can be temporarily exceeded in
case of potential attractive bolt-on in-market M&A opportunities.

DNA's net sales are expected to increase moderately and the operating result
is expected to grow significantly in 2016 compared to 2015. The Group's
financial position is expected to remain at a healthy level.

During the second quarter, net sales were expected to remain at a similar
level and the operating result was expected to grow significantly in 2016
compared to 2015. The Group's financial position was expected to remain at a
healthy level.

The statements set forth above include forward-looking statements and are not
guarantees of DNA's financial performance in the future. DNA's actual results
and financial position could differ materially from those expressed or
implied by these forward-looking statements as a result of many factors.

[1] Free cash flow to equity (FCFE) is defined as comparable EBITDA less
operative capital expenditure (total capital expenditure excluding the annual
cash instalment for spectrum licenses), less change in net working capital
including an adjustment between operative capital expenditure and cash-based
capital expenditure in order to present FCFE on a cash basis, however
excluding cash instalments for spectrum licenses and adjusted with the items
affecting comparability, less change in provisions, net interest paid and
income taxes paid

Decisions of the Extraordinary General Meeting held on 25 October 2016 and
changes in the Board of Directors composition
The Company's Extraordinary General Meeting held on 25 October 2016 elected
Mr. Pertti Korhonen as a new member of the Board of Directors of DNA. The
existing members of DNA's Board of Directors will continue as board members.
In addition, the Board of Directors has decided, conditional upon
consummation of the IPO and listing of the Company, to elect Mr. Pertti
Korhonen as the Chairman of the Board of Directors, with such election taking
effect on the day following the contemplated listing of the Company. Pertti
Korhonen is independent of the Company and the Company's significant
shareholders.

The Company's Extraordinary General Meeting held on 25 October made decisions
required by the contemplated IPO and listing. The Company's Extraordinary
General Meeting decided e.g. to change the Company's form from a private
limited liability company to public limited liability company and decided on
other changes to the Company's articles of association including changes
required for the contemplated listing. The Company's Extraordinary General
Meeting decided to increase the number of the Company's shares by way of a
share split, in which new shares will be issued to the shareholders without
payment in proportion to their holdings so that, for each share, shareholders
will receive 14 new shares. After the share split, the total number of the
Company's shares will be 127,325,850. In addition, the Extraordinary General
Meeting authorized the Board of Directors to decide on a share issue and the
granting of options and other special rights entitling to shares referred to
in Chapter 10, section 1 of the Companies Act. A maximum of 7,500,000 new
shares or treasury shares held by the Company can be issued under the
authorization. The maximum number under the authorization corresponds to
approximately 5.9% of the Company's shares after the proposed share split has
been completed. The authorisation allows the Board of Directors to decide
upon a directed issue including the right to derogate from the shareholders'
pre-emptive subscription right and upon the granting of special rights
provided that the requirements set forth by law are met. The Board of
Directors can act on this authorization in connection with the shar...

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