The Board of Directors in Metacon intends to resolve on a rights issue of approximately SEK 120 million

The Board of Directors in Metacon intends to resolve on a rights issue of approximately SEK 120 million.

The Board of Directors of Metacon AB (publ) (“Metacon” or the “Company”) today announces its intention to resolve on rights issue of units consisting of new shares and warrants of series TO 1, of approximately SEK 120 million (the “Rights Issue”). In total, subscription commitments from members of the Board of Directors and senior management amount to approximately SEK 2.4 million. The Company has also received guarantee undertakings, subject to customary conditions which, in aggregate, amount to approximately SEK 97.6 million. Accordingly, the Rights Issue is covered by subscription commitments and guarantee undertakings up to approximately SEK 100 million. In order to secure the financing requirement from January to February 2024, the Company has entered into a bridge loan agreement of SEK 10 million at market terms and with a granted option to increase to SEK 25 million. Due to the Rights Issue, the publishing of Metacon’s year-end report will be postponed to 28 March 2024. An extraordinary general meeting is planned to be held on or about 24 January 2024 to authorize the Board of Directors to resolve on the Rights Issue and its terms as well as to resolve to amend the articles of association’s limits for share capital and number of shares. Notice to the extraordinary general meeting will be announced through a separate press release.

Summary

• The Board of Directors of Metacon today announces its intention to resolve on a rights issue of units of approximately SEK 120 million, before deduction of transaction costs, which is partially covered by subscription commitments and guarantee undertakings.
• In connection with the Rights Issue, the Company has entered into a bridge loan agreement of SEK 10 million at market terms, with a granted option to increase to SEK 25 million, to ensure sufficient liquidity during the period January to February 2024.
• An extraordinary general meeting is planned to be held on or about 24 January 2024 and the notice will be announced through a separate press release.
• The net proceeds from the Rights Issue are intended to be used for the following purposes in order of priority: (i) Repayment of bridge loan, (ii) international expansion and capacity-build in strategic projects, (iii) strengthened organization, (iv) working capital purposes and (v) development of partnerships.
• The subscription commitments from persons from the Board of Directors and senior management amount to approximately SEK 2.4 million.
• The Company has received guarantee undertakings amounting to approximately SEK 97.6 million. Together with the subscription commitments, the Rights Issue is covered by subscription commitments and guarantee undertakings up to approximately SEK 100 million.
• If the Rights Issue is fully subscribed and upon full exercise of warrants of series TO 1, the Company is expected to raise up to an additional approximately SEK 60 million, before deduction of transaction costs.
• The subscription period in the Rights Issue is expected to take place during the period from and including 5 February 2024 until and including 19 February 2024.
• The subscription period for warrants of series TO 1 is expected to commence approximately 12 months after the completion of the Rights Issue.
• Complete terms of the Rights Issue are expected to be communicated around 25 January 2024.
• The subscription price in the Rights Issue will be determined by the Board of Directors at a customary discount.

Christer Wikner, CEO of Metacon comments:

I am very pleased that we are now acquiring the additional resources required to take the company to the next phase in terms of commercialization and scalability in this highly expansive and global growth industry that green hydrogen has grown into in the last year.

“It is also pleasing to note that we received a large and quick response from the investors who contribute to securing the new share issue at the desired level and that there is great interest in Metacon and the hydrogen market.”

Background and rationale

In order to support Metacon’s strategy and opportunities to achieve its future commercial and financial goals, the Board of Directors intends to resolve on the Rights Issue. The net proceeds from the Rights Issue are expected to help the Company promote growth and commercialization, with a focus on strengthening the Company’s production capacity in strategic projects, which includes, among other things, the establishment of serial production of Metacon’s patented catalytic reactors, which are the heart of the Company’s reforming products. This is deemed necessary in order to meet expected demand from Metacon’s future customers as well as the previously announced collaborations with PERIC Hydrogen Technologies Co., Ltd. for the Chinese market and for ongoing collaborative projects with the Company’s partners in ammonia for deep sea shipping and ethanol-to-hydrogen for fast charging of battery vehicles and for so-called microgrids. Furthermore, the Company plans to expand internationally, accelerate product development and strengthen its organizational capacity to optimize operations and effectively manage its growth.

Including the new major investments that the Company plans to make, the Company’s assessment is that the existing working capital is not sufficient for the current needs during the next twelve months.

Use of proceeds

If the Rights Issue is fully subscribed, the Company will receive approximately SEK 120 million before deduction of transaction costs. Given the Company’s current business plan and considering the abovementioned background, the Company will use the net proceeds for the following purposes listed in order of priority:

• Approximately 10 – 20 percent will be used for repayment of the bridge loan, including interest and a set-up fee. The loan amounts to approximately SEK 25 million at full utilization and aims to sustain liquidity throughout January to February to start initiate growth and expansion plans.
• Approximately 20 – 30 percent will be used to start to establish own manufacturing capability delivering full scale reactors for Metacon’s hydrogen generators (HHG) and prepare technology transfer for the production of complete hydrogen generators to manufacturing partners including PERIC, ensuring supply capacity and expanding the international presence of Metacon’s hydrogen generators in the European and Chinese market.
• Approximately 10 – 20 percent will be used to strengthen and expand the organization with experienced management, engineering, and sales resources to drive global expansion, sales growth and delivery capability for the Company’s products and services including leading or participating in large scale sales projects of industrial electrolysis plants with a capacity of 10 – 500 MW in various European countries.
• Approximately 10 – 20 percent will be used to strengthen the Company’s working capital including trade finance needs to meet the increased demand for electrolysers and associated systems for storage, transportation, and refueling stations.
• Approximately 10 – 20 percent will be used to develop strategic partnerships and growth initiatives with industry leading players in the biogas, hydrogen and related industrial sectors to, among other things, create demonstration sites in order to accelerate sales efforts through longer term partnerships.

If the Rights Issue is fully subscribed and upon full exercise of warrants of series TO 1, the Company is expected to raise up to an additional approximately SEK 60 million, before deduction of transaction costs. The net proceeds from the warrants of series TO 1 will be used for the same purposes as the above.

The bridge loan

To ensure sufficient liquidity during the period January to February 2024, the Company has entered into a bridge loan agreement of SEK 10 million at market terms and with a granted option to increase to SEK 25 million. The bridge loan will be repaid with the proceeds from the Rights Issue.

Extraordinary general meeting

The Board of Directors intends to convene an extraordinary general meeting through a separate press release, which is planned to be held on or about 24 January 2024, to authorize the Board of Directors to resolve on the Rights Issue and its terms as well as amendments to the articles of association’s limits for share capital and number of shares.

Complete terms of the Rights Issue are expected to be announced on or about 25 January 2024.

Subscription commitments and guarantee undertakings

The Company has received subscription commitments from members of the Board of Directors and senior management that amount to approximately SEK 2.4 million.

Guarantors have provided guarantee undertakings subject to customary conditions which, in aggregate, amount to approximately SEK 97.6 million. Together with the subscription commitments, the Rights Issue is thus covered by subscription commitments and guarantee undertakings up to approximately SEK 100 million.

No fee is paid for submitted subscription commitments from members of the Board of Directors and senior management. A guarantee fee will be paid to the guarantors, based on current market conditions, of eleven (11) percent of the guaranteed amount in cash. Neither the subscription commitments nor the guarantee undertakings are secured through bank guarantees, restricted funds, pledged assets or similar arrangements.

Further information regarding the parties who have entered into subscription commitments and guarantee undertakings will be presented in the prospectus that will be made public before the commencement of the subscription period.

Lock-up undertakings

Prior to the execution of the Rights Issue, all members of the Board of Directors and senior management of the Company which are shareholders in the Company have entered into lock-up undertakings, which, among other things and with customary exceptions, mean that they have undertaken not to sell shares in the Company. The lock-up undertakings expire on the day that falls 180 days after the settlement date in the Rights Issue.

Furthermore, the Company has undertaken towards Pareto Securities AB, subject to customary exceptions, not to issue additional shares or other share-related instruments for a period of 12 months after the end of the subscription period.

Preliminary timetable

Prospectus
A prospectus and subscription form will be made available before subscription period commence on Metacon’s website, www.metacon.com and on Pareto Securities AB:s website, www.paretosec.com.

Advisers
Pareto Securities is Sole Manager and Bookrunner, Advokatfirman Schjødt is legal adviser to the Company and Baker & McKenzie Advokatbyrå KB is legal adviser to Pareto Securities in connection with the Rights Issue.

READ the latest news shaping the hydrogen market at Hydrogen Central

The Board of Directors in Metacon intends to resolve on a rights issue of approximately SEK 120 million. source