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2016-04-12

Lehto Group Oyj: LEHTO GROUP PLC ANNOUNCES THE INITIAL PRICE RANGE FOR ITS PLANNED INITIAL PUBLIC OFFERING; THE FINNISH LANGUAGE PROSPECTUS HAS BEEN APPROVED

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LEHTO GROUP PLC ANNOUNCES THE INITIAL PRICE RANGE FOR ITS PLANNED INITIAL
PUBLIC OFFERING; THE FINNISH LANGUAGE PROSPECTUS HAS BEEN APPROVED

Lehto Group Plc ("Lehto Group" or "Company") announces the initial price range
for the share issue and sale in connection with its planned listing of its
shares ("Initial Public Offering" or "IPO", as defined in more detail below).
The Company announced on 29 March 2016 that it is planning an initial public
offering on the official list of Nasdaq Helsinki Ltd ("Nasdaq Helsinki" or
"Helsinki Stock Exchange"). Pursuant to an authorisation by the Annual
General Meeting held on 30 March 2016, the Company's Board of Directors has
decided to arrange the Initial Public Offering.

IPO in brief

* The preliminary subscription price in the IPO is EUR 4.50-5.10 per share
("Initial Price Range").
* In the planned Initial Public Offering: * The Company preliminarily offers
up to 11,874,705 new shares in the Company ("Issue Shares") to
institutional investors in Finland and internationally ("Institutional
Offering"), to private individuals and organisations in Finland ("Public
Offering"), as well as to the personnel of the Company in Finland
("Personnel Offering", and together with the Institutional Offering and the
Public Offering, "Share Issue"). * In addition, certain shareholders of the
Company ("Selling Shareholders") will preliminarily offer for purchase up
to 1,732,340 shares ("Sale Shares", and together with the Issue Shares,
"Offer Shares") to institutional investors in Finland and internationally
("Share Sale", and together with the Share Issue, "Offering"). * The
Selling Shareholders have granted OP Corporate Bank plc an over-allotment
option ("Over-Allotment Option") exercisable within 30 days of the
commencement of trading in the Company's shares ("Shares") on the Helsinki
Stock Exchange to purchase or to procure purchasers for up to 1,470,821
Shares in the Company at the final subscription price as the maximum price
solely to cover over-allotments. * Certain institutional investors
("Cornerstone Investors") have each individually committed to subscribe for
Offer Shares in the IPO at the final subscription price. The total
commitments of the Cornerstone Investors amount to EUR 25 million. The
Cornerstone Investors are certain funds of Danske Invest Fund Management
Ltd (EUR 6.5 million), certain funds of OP Fund Management Company Ltd (EUR
6 million), Mevita Invest Oy (EUR 2.5 million) and certain funds
represented by SEB Investment Management AB (EUR 10 million).
* The Initial Price Range implies a pre-money market capitalisation for the
Company of approximately EUR 204-231 million.
* Assuming that Issue Shares corresponding to gross proceeds of EUR 60.5
million are subscribed for in the Share Issue, that the maximum amount of
Sale Shares is sold in the Share Sale and that the Over-Allotment Option is
exercised in full, the transaction value of the IPO is approximately EUR
67.3-76.8 million based on the Initial Price Range.
* Assuming that all Issue Shares are fully subscribed for in the Share Issue
and the Conversion (as defined below) is fully subscribed for, the total
number of the Shares will increase to up to 58,392,838 Shares.
* The subscription period for the Public Offering will commence on 13 April
2016 at 9.00 a.m. EET and end at the latest on 25 April 2016 at 6.00 p.m.
EET.
* The subscription period for the Personnel Offering will commence on 13
April 2016 at 9.00 a.m. EET and end at the latest on 20 April 2016 at 6.00
p.m. EET.
* The subscription period for the Institutional Offering and Share Sale will
commence on 13 April 2016 at 9.00 a.m. EET and end at the latest on 26
April 2016 at 2.00 p.m. EET.
* The first day of trading on the prelist of Nasdaq Helsinki is expected to
be 28 April 2016 and the shares will trade under the symbol "LEHTO".

Hannu Lehto, CEO of Lehto Group comments:

"Lehto Group has grown strongly into one the largest construction and real
estate groups in Finland. We believe that the listing will help us to
continue the dedicated implementation of our growth strategy and further
enhance awareness of the Company. Our operations are led by an economically
driven construction operating model which we have developed. With this model
that is based on strong planning management and module based innovations we
aim to reform the operation models of construction and to ensure high quality
construction and cost and time benefits for our clients. The listing will
also improve our transparency and support our image as an employer.
"

Pertti Huuskonen, chairman of Lehto Group's Board of Directors comments:

"Because of our economically driven construction operating model and
conceptualised solutions for different customer groups, Lehto Group has good
growth potential also in the future. As a result of the listing our ownership
base broadens and we want to offer the Company's new shareholders the
opportunity to be part of the future development of Lehto Group. The listing
gives the Company the prospect to continue to grow and supports the funding
of the most important upcoming strategic projects as well as the development
of new innovative products.
"

Background for the listing and use of proceeds

The objective of the listing is to enable the successful implementation of the
Company's strategy, for which the Company is also aiming to raise new funds
through a share issue in order to finance growth. In addition, the listing is
expected to improve Lehto Group's profile and credibility among its existing
and potential new customers, partners and investors. The Company believes
that a higher profile and credibility will promote Lehto Group's business
operations in both private and public sector construction projects and that
it supports the Company's image as an employer. With the Initial Public
Offering, the Company aims to expand its shareholder base with both Finnish
and international investors. As the shareholder base expands, the number of
shareholders who are independent of the Company will increase, supporting the
liquidity of the Company's share and the formation of the share price.
Additionally, the listing provides the Company's current shareholders with
the opportunity to trade in their Shares on market terms. The listing is also
expected to give the Company a better opportunity to use its own Shares to
finance business acquisitions in support of its strategy.

The Company aims to use the proceeds from the Initial Public Offering to
ensure an adequate level of self-financing for the Company's key future
projects in line with its strategy. The proceeds from the Initial Public
Offering will be used, among others, (i) for the acquisition of plots and
land areas; (ii) for the development of module production and concept
construction; (iii) for the acquisition of properties for purpose of use
alternations; (iv) to increase commercial property development; and (v) to
ensure sufficient funds for working capital, corporate acquisitions,
international expansion and other strategic investments as they arise during
the Company's growth. The proceeds from the Initial Public Offering will also
enable and facilitate the availability of debt financing on terms that are
favourable for the Company. In addition to the proceeds from the Initial
Public Offering the Company will require debt financing in order to implement
its growth strategy, which the Company will be acquiring from financial
institutions mainly on a project-specific level.

About the IPO

The Annual General Meeting of shareholders of the Company resolved on 30 March
2016 to authorise the Board of Directors of the Company to decide on an
increase in the number of the Shares by a maximum of 16,500,000 new Shares in
the Initial Public Offering. Based on the authorisation granted by the Annual
General Meeting of the shareholders, the Board of Directors resolved on 11
April 2016 to issue a maximum of 11,874,705 Issue Shares to be subscribed in
the Share Issue by way of an offer to institutional investors in Finland and
internationally and private individuals and entities in Finland and to the
personnel of the Company in Finland.

In accordance with the terms and conditions of the convertible loan,
Osuuskunta PPO has a right and an obligation to convert the convertible loan
to the Shares of the Company in connection with the Initial Public Offering
("Conversion"). The maximum amount to be converted is EUR 5,000,000, provided
however, that in accordance with the terms and conditions of the convertible
loan, the amount of the new Shares offered in the Conversion may not exceed
2,918,368. Pursuant to the terms and conditions of the convertible loan the
subscription price of the Shares in the Conversion is 0.92 x the final
subscription price in the Institutional Offering. Calculated based on the
lowest price of the Initial Price Range, the new Shares offered in the
Conversion amount to no more than 1,207,729 new Shares, which represent
approximately no more than 2.7% of the Shares and votes prior to the Initial
Public Offering, and approximately 2.1% of the Shares and votes after the
Initial Public Offering, assuming that all Issue Shares preliminarily offered
in the Initial Public Offering and the Conversion are fully subscribed for.

As a result of the Share Issue, the number of the Shares can increase to a
maximum of 57,185,109 Shares and after the Conversion is fully executed to a
maximum of 58,392,838 Shares. The Issue Shares to be released in the Share
Issue represent approximately 26.2% of the Shares and votes before the
Initial Public Offering and approximately 20.4% after the Initial Public
Offering, assuming that all Issue Shares preliminarily offered in the Initial
Public Offering and the Conversion are fully subscribed for.

The Issue Shares are offered in deviation from the shareholders' pre-emptive
subscription right in order to broaden the Company's ownership base and
strengthen the capital structure. Broadening the Company's ownership base
enables the listing of the Shares for trading on the official list of
Helsinki Stock Exchange. The payment made to the Company for the approved
Issue Share subscriptions will be booked in its entirety in the invested
unrestricted equity fund. Thus, the Company's share capital will not increase
in connection with the Share Issue.

The Selling Shareholders will preliminarily offer for purchase no more than
1,732,340 Sale Shares to institutional investors in Finland and
internationally. The Sale Shares represent approximately 3.8% of the Shares
and votes before the Initial Public Offering and approximately 3.0% after the
Initial Public Offering, provided that all Issue Shares preliminary offered
in the Initial Public Offering and the Conversion are fully subscribed for.
The Selling Shareholders will remain major shareholders in the Company also
after the IPO.

The terms and conditions of the Initial Public Offering are annexed to this
release in their entirety.

OP Corporate Bank plc acts as the Global Coordinator and Joint Bookrunner for
the Initial Public Offering and Pareto Securities Oy as Joint Bookrunner
(together, "Bookrunners"). Krogerus Attorneys Ltd acts as the legal advisor
of the Company. Roschier, Attorneys Ltd. acts as the legal advisor of the
Bookrunners.

Preliminary timetable of the Initial Public Offering and listing (all times
are Finnish time)

* Approval of Finnish language prospectus: 11 April 2016
* The subscription period for the Institutional Offering, Share Sale, Public
Offering and Personnel Of...

Författare Hugin

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