Reach Subsea ASA – Private placement successfully placed

15 Feb 2023 23:52 CET

Reach Subsea ASA – Private placement successfully placed

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INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, JAPAN, HONG KONG, SOUTH AFRICA OR THE
UNITED STATES, OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR
DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER
OF ANY OF THE SECURITIES DESCRIBED HEREIN.

Haugesund, 15 February 2023: Reference is made to the stock exchange
announcement by Reach Subsea ASA ("Reach" or the "Company") on 15 February 2023
regarding a contemplated private placement (the "Private Placement") of new
shares.

The book-building for the Private Placement has now been successfully completed.
The Company's board of directors (the "Board") have allocated a total of
29,411,000 new shares in the Company (the "Offer Shares") (conditionally in
respect of Tranche 2 (as defined and further described below), each at a
subscription price of NOK 4.25 per Offer Share (the "Subscription Price"),
raising gross proceeds of approx. NOK 125 million.

The Company will use the net proceeds from the Private Placement (i) to finance
the equity portion of the Company's planned acquisition of Subsea IMR vessel
“Edda Sun”, (ii) for investments in necessary equipment and mobilization of
three new vessels (which in addition to “Edda Sun” includes “Go Electra” and
“Olympic Triton), (iii) for working capital and (iv) for general corporate
purposes. To fully finance the vessel and equipment investments Reach Subsea has
obtained NOK 150 million in new bank financing (“Edda Sun” vessel financing) and
NOK 75 million in lease financing (equipment). The remaining NOK 225 million
will be financed by equity. Ownership of “Edda Sun” will be structured and held
in a special purpose vehicle (the "SPV") which is expected to be owned 49.9% by
Reach Subsea, and 50.1% by a strategic vessel owning partner (the "Partner").
The Partner intends to invest NOK 100 million directly in the SPV with NOK 100
million being financed by Reach Subsea using proceeds raised in the Private
Placement.

North Industries 1 AS ("North Industries"), a company controlled by chairman of
the Board Rachid Bendriss and Board member Anders Onarheim, was allocated
4,705,882 Offer Shares in the Private Placement. Wilhelmsen New Energy AS
("Wilhelmsen New Energy"), a company owned by Oslo Børs listed shipping
conglomerate Wilh. Wilhelmsen Holding ASA, was allocated 6,010,069 Offer Shares
in the Private Placement. Certain other primary insiders in the Company were
allocated New Shares for an aggregate amount of approx. NOK 4 million in the
Private Placement. Mandatory notifications of such trades will be disclosed
separately.

Notifications of allocations are expected to be distributed to subscribers on or
about 16 February 2023.

Settlement in the Private Placement is expected to take place as follows:
- Settlement of up to 22,500,000 Offer Shares (the “T1 Offer Shares”), which
equals the maximum number of shares the Board may issue pursuant to the
authorization granted by the Company’s annual general meeting of 30 May 2022
(the “Board Authorization”), is expected to take place on 20 February 2023
("Tranche 1"). The T1 Offer Shares will be settled on a delivery-versus-payment
basis with existing and unencumbered shares in the Company that are already
listed on the Oslo Stock Exchange, to be lent from North Industries (the “Share
Lender”, in its capacity as such) by the Managers pursuant to a share lending
agreement entered into between the Managers, Reach and the Share Lender (the
“Share Lending Agreement”). The Offer Shares in Tranche 1 are expected to be
tradeable from notification of allocation, expected on or about 16 February
2023.

- Payment date for the remaining 6,911,000 Offer Shares ("T2 Offer Shares") in
tranche 2 ("Tranche 2") is expected to be on or about 13 March 2023 following
and subject to (inter alia) a resolution by an extraordinary general meeting of
the Company, expected on or about 10 March 2023 (the “EGM”), to issue the T2
Offer Shares. Delivery of the T2 Offer Shares is expected to occur on or about
14 March 2023, following registration of the share capital increase pertaining
to the T2 Offer Shares with the Norwegian Register of Business Enterprises.
Completion of Tranche 1 will not be conditional upon or otherwise affected by
the completion of Tranche 2, and the applicants' acquisition of T1 Offer Shares
will remain final and binding and cannot be revoked, cancelled or terminated by
the respective applicants if Tranche 2, for whatever reason, is not completed.
North Industries, Wilhelmsen New Energy and other applicants that are allocated
shares in the Private Placement have in the application agreement undertaken to
vote in favour of the issuance of Offer Shares in Tranche 2 at the EGM.
Based on the Board Authorization, the Board has resolved to issue 22,500,000 new
shares for settlement in Tranche 1. The T1 Offer Shares will be subscribed for
by the Managers and, once issued, delivered to the Share Lender as settlement
for shares borrowed by them under the Share Lending Agreement.
As the number of shares allocated in the Private Placement exceeds the maximum
number of shares available under the Board Authorization, the Board has, inter
alia, resolved to (i) convene an EGM to approve the issuance of the T2 Offer
Shares for the purpose of delivery of such Offer Shares to North Industries and
Wilhelmsen New Energy and (ii) authorize the Board to issue new shares in a
potential Subsequent Offering (as defined and further described below). Should
the EGM fail to approve such issuance, the completion of the Private Placement
will not be affected, but (a) North Industries and Wilhelmsen New Energy will
not receive the shares in Tranche 2 and (b) the Company's gross proceeds from
the Private Placement will be limited to the gross proceeds from the Offer
Shares in Tranche 1.

Following registration of the share capital increase pertaining to Offer Shares
in Tranche 1, the issued share capital of the Company will be NOK 248,225,928.00
divided into 248,225,928 shares, each with a nominal value of NOK 1.00.
Following (and subject to) registration of the share capital increase pertaining
to Offer Shares also in Tranche 2, the issued share capital of the Company will
be NOK 255,136,928.00 divided into 255,136,928 shares, each with a nominal value
of NOK 1.00.

The Board has considered the Private Placement in light of the equal treatment
obligations under the Norwegian Public Limited Companies Act, the Norwegian
Securities Trading Act and the rules on equal treatment under Oslo Rule Book II
for companies listed on the Oslo Stock Exchange and the Oslo Stock Exchange's
guidelines on the rule of equal treatment, and is of the opinion that the
proposed Private Placement is in compliance with these requirements. By
structuring the transaction as a private placement, the Company was in a
position to raise capital in an efficient manner, with a lower discount to the
current trading price and with significantly lower completion risks compared to
a rights issue. In addition, the Private Placement was subject to marketing
through a publicly announced bookbuilding process and a market-based offer price
should therefore have been achieved. Furthermore, the number of Offer Shares to
be issued in connection with the contemplated Private Placement implies that the
dilution of existing shareholders will be limited and below applicable
prospectus thresholds. On this basis and based on an assessment of the current
equity markets, the Board has considered the Private Placement to be in the
common interest of the Company and its shareholders. As a consequence of the
contemplated Private Placement structure, the shareholders' preferential rights
to subscribe for the Offer Shares will be deviated from.

To mitigate the dilution of existing shareholders not participating in the
Private Placement, the Board has resolved to undertake a subsequent offering
(the "Subsequent Offering") of up to 3,000,000 new shares towards the Company's
shareholders as of 15 February 2023 (as documented by the shareholder register
in the Norwegian Central Securities Depository (VPS) as of the end of 17
February 2023) who (who (i) were not included in the wall-crossing phase, (ii)
were not allocated Offer Shares in the Private Placement, and (iii) are not
resident in a jurisdiction where such offering would be unlawful or would (in
jurisdictions other than Norway) require any prospectus, filing, registration or
similar action. The subscription price in the Subsequent Offering will be equal
to the subscription price in the Private Placement.

The Subsequent Offering is further subject to i) approval of the EGM to
authorise the Company's Board to issue shares in the Subsequent Offering, ii)
the publication of an offering prospectus pertaining to the Subsequent Offering
and iii) the prevailing market price of the Company's shares following the
Private Placement. The Board may decide that the Subsequent Offering will not be
carried out in the event that the Company's shares trade at or below the
subscription price in the Subsequent Offering at meaningful volumes.

Arctic Securities AS, Fearnley Securities AS and SpareBank 1 Markets AS are
appointed by the Company as joint lead managers and joint bookrunners for the
Private Placement.
Advokatfirmaet Schjødt AS is acting as legal advisor to the Company.

For more information please contact:
Birgitte Wendelbo Johansen
Chief Financial Officer Reach Subsea ASA
bwj@reachsubsea.no

About Reach Subsea:
Reach Subsea ASA Group offers subsea services as a subcontractor and/or directly
to end clients, based out of our head office in Haugesund. The core business of
the Group is based on modern, high spec Work ROVs operated by highly-qualified
offshore personnel, and supported by onshore engineering resources. The Group’s
objective is to be a preferred subsea partner and full-service provider of
subsea operations for clients, focusing on safety, environment, financial
solidity and profitability. www.reachsubsea.no

IMPORTANT NOTICE
This announcement is not and does not form a part of any offer to sell, or a
solicitation of an offer to purchase, any securities of Reach. The distribution
of this announcement and other information may be restricted by law in certain
jurisdictions. Copies of this announcement are not being made and may not be
distributed or sent into any jurisdiction in which such distribution would be
unlawful or would require registration or other measures. Persons into whose
possession this announcement or such other information should come are required
to inform themselves about and to observe any such restrictions.

The securities referred to in this announcement have not been and will not be
registered under the U.S. Securities Act of 1933, as amended (the "Securities
Act"), and accordingly may not be offered or sold in the United States absent
registration or an applicable exemption from the registration requirements of
the Securities Act and in accordance with applicable U.S. state securities laws.
The Company does not intend to register any part of the offering or their
securities in the United States or to conduct a public offering of securities in
the United States. Any sale in the United States of the securities mentioned in
this announcement will be made solely to "qualified institutional buyers" as
defined in Rule 144A under the Securities Act.
In any EEA Member State, this communication is only addressed to and is only
directed at qualified investors in that Member State within the meaning of the
Prospectus Regulation, i.e., only to investors who can receive the offer without
an approved prospectus in such EEA Member State. The expression "Prospectus
Regulation" means Regulation 2017/1129, as amended, together with any applicable
implementing measures in any Member State.
This communication is only being distributed to and is only directed at persons
in the United Kingdom that are (i) investment professionals falling within
Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005, as amended (the "Order") or (ii) high net worth entities,
and other persons to whom this announcement 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"). This communication must not be acted
on or relied on by persons who are not relevant persons. Any investment or
investment activity to which this communication relates is available only for
relevant persons and will be engaged in only with relevant persons. Persons
distributing this communication must satisfy themselves that it is lawful to do
so.
Matters discussed in this announcement may constitute forward-looking
statements. Forward-looking statements are statements that are not historical
facts and may be identified by words such as "believe", "expect", "anticipate",
"strategy", "intends", "estimate", "will", "may", "continue", "should" and
similar expressions. The forward-looking statements in this release are based
upon various assumptions, many of which are based, in turn, upon further
assumptions. Although the Company believes that these assumptions were
reasonable when made, these assumptions are inherently subject to significant
known and unknown risks, uncertainties, contingencies and other important
factors which are difficult or impossible to predict and are beyond its control.
Actual events may differ significantly from any anticipated development due to a
number of factors, including without limitation, changes in investment levels
and need for the Company's services, changes in the general economic, political
and market conditions in the markets in which the Company operate, the Company's
ability to attract, retain and motivate qualified personnel, changes in the
Company's ability to engage in commercially acceptable acquisitions and
strategic investments, and changes in laws and regulation and the potential
impact of legal proceedings and actions. Such risks, uncertainties,
contingencies and other important factors could cause actual events to differ
materially from the expectations expressed or implied in this release by such
forward-looking statements. The Company does not provide any guarantees that the
assumptions underlying the forward-looking statements in this announcement are
free from errors nor does it accept any responsibility for the future accuracy
of the opinions expressed in this announcement or any obligation to update or
revise the statements in this announcement to reflect subsequent events. You
should not place undue reliance on the forward-looking statements in this
document.
The information, opinions and forward-looking statements contained in this
announcement speak only as at its date, and are subject to change without
notice. The Company does not undertake any obligation to review, update,
confirm, or to release publicly any revisions to any forward-looking statements
to reflect events that occur or circumstances that arise in relation to the
content of this announcement.
Neither the Managers nor any of their respective affiliates makes any
representation as to the accuracy or completeness of this announcement and none
of them accepts any responsibility for the contents of this announcement or any
matters referred to herein.
This announcement is for information purposes only and is not to be relied upon
in substitution for the exercise of independent judgment. It is not intended as
investment advice and under no circumstances is it to be used or considered as
an offer to sell, or a solicitation of an offer to buy any securities or a
recommendation to buy or sell any securities in the Company. Neither the
Managers nor any of their respective affiliates accepts any liability arising
from the use of this announcement.
This information is considered to be inside information pursuant to the EU
Market Abuse Regulation (MAR) and is subject to the disclosure requirements
pursuant to MAR article 17 and Section 5-12 the Norwegian Securities Trading
Act. This stock exchange announcement was published by Birgitte Wendelbo
Johansen, Chief Financial Officer at Reach Subsea ASA on the time and date
provided.

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