Ice Group has announced plans for a convertible bond loan with gross proceeds of NOK 650 million to NOK 1.20 billion. Its three major shareholders have subscribed to the offer, and the operator will later make an offer to smaller shareholders, although this will not be open to retail investors. CEO Eivind Helgaker said the issue should provide Ice with sufficient liquidity to reach cash flow break-even and reach its operational and financial targets.
The mobile operator said the issue has a five-year duration and an interest rate of 8 percent per annum if paid in cash, or 10 percent if paid in kind (PIK). The bonds may be converted at a price of NOK 19.51, being 37.5 percent above the volume-weighted average share price, calculated over ten trading days prior to the issue date.
AI Media Holdings, Rasmussen Gruppen and Bridford Investments hold approximately 82 percent of the shares in Ice and have subscribed to the full issue of NOK 650 million. They also have an option to carry out a tap issue of NOK 350 million at identical terms, which must be exercised by 21 September 2020, and is subject to execution of an agreement amending the terms and permitting partial prepayment of a subordinated loan granted to AINMT Holdings by GoldenTree.
Ice will carry out a subsequent bond offering at identical to enable shareholders other than the three major ones to subscribe for bonds equal to 20 percent of those issued to the big three. The subsequent offering will be directed to shareholders of record on 28 August, provided they do not qualify as retail investors in the EEA or UK under PRIIPS rules. The minimum subscription will be EUR 100,000. Eligible shareholders may subscribe for bonds up to their pro-rata ownership in Ice on the record date.
The subscription period for the subsequent offering will be from 09:00 hrs on 22 September to 16:30 hrs on 24 September. The completion is expected on 01 October.
The bond issue and subsequent offering are based on an authorisation to the board of directors granted at the annual general meeting (AGM) on 29 May. The structure of the issue deviates from shareholders' preferential right. The board considers the instrument to be relatively complex and therefore not suited for retail investors.
Ice said the board had looked at financing alternatives over a long period of time and concluded that it would be unlikely to obtain financing on more favourable terms under the prevailing market conditions. By omitting retail investors, Ice avoids having to prepare a prospectus and to prepare and update a Key Information Document under PRIIPS regulations.
Separately, Ice said AI Media has subscribed for the convertible bond to the tune of NOK 260 million, giving it the right to subscribe for almost 13.33 million new shares in Ice. After such subscription, it owns more than 125.74 million shares in Ice, equal to 62.3 percent, and holds the right to subscribe for another 13.33 million, equal to 6.6 percent..Accordingly, AI Media Holdings owns and holds rights to an aggregate of 139.07 million shares, or approximately 68.9 percent, and equal to 59.1 percent of the shares assuming full conversion of the convertible loan.
Ice also said Bridford has subscribed for a total of NOK 260 million, too providing the right to subscribe for nearly 13.33 million new shares upon conversion.
After subscription, former director Hermann Siegfried Jorg Mohaupt and related parties including Bridford Investments owns over 17.17 million shares in Ice, equal to 8.5 percent of the issued and outstanding shares, and holds the right to subscribe to another 13.33 million shares, equal to 6.6 percent. Accordingly, Mohaupt and related parties owns and holds rights to an aggregate of almost 30.50 million shares in Ice, equal to approximately 15.1 percent of shares and equal to 13.0 percent assuming full conversion.
