Quantafuel ASA | The board unanimously recommends a cash offer from Viridor to acquire all outstanding shares in Quantafuel, concluding the strategic review process

28 Feb 2023 13:45 CET

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OFFER SUMMARY
• Quantafuel ASA ("Quantafuel" or the "Company") has entered into a transaction
agreement for a unanimously recommended cash offer for all issued and
outstanding shares in Quantafuel (the "Offer") by Harald Norway Bidco AS (the
"Offeror"), a wholly-owned subsidiary of Viridor Limited ("Viridor"), which in
turn is controlled by funds advised by Kohlberg Kravis Roberts & Co. L.P. or its
affiliates ("KKR")
• The shareholders of Quantafuel will receive a cash offer of NOK 6.38 per share
• The Company’s two largest shareholders, KIRKBI and BASF, representing approx.
20.3% of the shares and both with a representative on Quantafuel’s board, as
well as members of Quantafuel’s board and executive management, have signed
irrevocable pre-acceptances
• The unanimous recommendation of the Offer by Quantafuel’s board is attached to
this announcement
• An offer document setting out the terms for the Offer will be made available
for shareholders by the Offeror prior to start of the offer period
• The Offer is subject to customary conditions from the Offeror, including a
minimum acceptance level of 90% and regulatory approvals
• The Offeror aims to delist Quantafuel from Euronext Growth upon completion of
the Offer

CONCLUSION OF THE STRATEGIC REVIEW
• Following the announcement of the strategic review on 12 October 2022,
Quantafuel’s management and board have, together with its financial advisor,
diligently conducted a broad process targeting potential strategic and/or
financial partners to secure a long-term financing solution for Quantafuel to
the benefit of the Company and its shareholders
• With reference to the operational and financial update presented as part of
the Q4 2022 release published earlier today, 28 February 2023, Quantafuel is
currently in a challenging financial situation, with a large short-term
liquidity shortfall and will need to secure funds before mid Q2 2023 to continue
its operations
• The understanding of the board is that the Company’s largest shareholders,
including KIRKBI and BASF, will not participate in an equity increase or debt
financing
• The Company currently sees no other viable and realistic, long-term financing
solutions as an alternative to the Offer
• Subject to the outcome of the Offer, the Offeror is committed to secure the
Company’s short-term financing need as well as invest in the Company to finance
new growth projects
• Viridor is motivated to build on the platform that the Company has created and
support it to deliver its long-term vision and commercialisation of its
technology
• If the condition for acceptance of 90% of the Offer is not met or waived by
the Offeror by the end of the offer period, the Quantafuel board will have to
consider alternative options to provide the Company with a short-term financing
solution. The board will closely monitor the liquidity situation and, inter
alia, consider the following alternatives: i) to carry out an equity raise in
accordance with existing authorisation granted to the board or subject to an
extraordinary general meeting, ii) a potential sale of major assets or iii) a
full liquidation of the Company
• Based on foreseeable market conditions, the financial situation of the Company
and lack of support for further equity from the Company’s largest shareholders,
the board supported by its financial advisor does not currently deem an equity
raise as a viable solution

Oslo, 28 February 2023: The Offeror has reached an agreement with the board of
directors of Quantafuel (the “Board”) to launch the recommended cash Offer for
all the issued and outstanding shares of the Company (the “Shares”). A cash
consideration of NOK 6.38 will be offered per Share, subject to customary
reduction by the amount of any dividend or other distributions to the Company’s
shareholders with a record date prior to completion of the Offer (the “Offer
Price”). The Offer Price implies a total consideration for all the Shares of
approximately NOK 1,058 million, based on 165,828,513 Shares outstanding as per
28 February 2023.

The Offer is the result of a broad strategic review authorised by the Board, as
announced by the Company on 12 October 2022. The Board supports and has
unanimously agreed to recommend the Offer, see further details below. The
Offeror has received irrevocable pre-acceptances to accept the Offer from the
Company’s two largest shareholders KIRKBI Invest A/S and BASF Antwerpen N.V., as
well as from members of the Board and the Company’s executive management,
totalling approximately 20.9% of the issued share capital of Quantafuel, subject
to the conditions described below.

The Offeror is a Norwegian private limited liability company 100% owned by
Viridor, which in turn is controlled by funds advised by KKR. The Viridor group
is one of the UK’s leading waste management companies, with a publicly stated
purpose “to build a world where nothing goes to waste” and a vision to be a
“leading innovator of resource recovery and recycling, transforming waste for a
climate positive future”.

Background and strategic rationale:

Kevin Bradshaw, CEO of Viridor, commented: "This proposed transaction combines
Viridor's extensive waste market experience and financial support with
Quantafuel's advanced plastic to liquid technology. It reflects the absolute
commitment from both organisations to deliver a circular economy in plastic and,
consequently, a more sustainable environment for us all”.

Lars Rosenløv Jensen, CEO of Quantafuel, commented: “Quantafuel has conducted a
broad process to secure a short and long-term financing solution for the
company. We see Viridor’s cash offer as the only available option that both
solves for the short-term financing needed as well as ensuring continued
operations for the company. Viridor is a good complementary fit and is, just
like Quantafuel, determined to play a leading role in transforming the waste
sector towards circularity. Plastic waste is one of our time’s most pressing
environmental challenges and chemical recycling is key to help solve this. I’m
glad that Viridor is eager to position Quantafuel for future growth and take on
the next chapter of the company’s journey”.

Ann-Christin Andersen, Chair of the Board of Quantafuel, commented: “In
preparation of the roll-out for the next generation Plastic-to-Liquid (PtL)
plants, the board decided to conduct a strategic review to assess the best
options for the next stage of growth. Through this work, we have concluded to
unanimously recommend the offer from Viridor to acquire all the shares in
Quantafuel. Quantafuel and Viridor complement each other well and we believe
that Viridor will allow Quantafuel to best realise its great potential”.

Further information about the Offer is set out below. Reference is also made to
the separate announcement made earlier today regarding the Company’s results for
Q4 2022, including the recent update on the Company’s operational and financial
status.

KEY TERMS OF THE OFFER

Pursuant to the Offer, the shareholders of the Company will be offered NOK 6.38
per Share, to be settled in cash following completion of the Offer. Completion
of the Offer will be subject to fulfilment or waiver by the Offeror of
completion conditions, including but not limited to shareholders representing
more than 90% of the Shares having accepted the Offer, any relevant regulatory
approvals being obtained, the Company having completed the sale of all its
shares in Geminor Invest AS on terms agreed with the Offeror and no material
adverse change having occurred. The Offer will not be conditional on financing
or further due diligence.

The complete terms and conditions of the Offer will be set out in an offer
document (the "Offer Document"), expected to be published and sent to the
Company’s shareholders in due course, with the acceptance period for the Offer
expected to commence on the same date (the "Offer Period"). The Offer Period is
expected to last for 20 US business days, subject to any extensions. The Offer
is expected to be completed during the second quarter of 2023.

The Offer may only be accepted on the basis of the Offer Document. Furthermore,
the Offer will not be made in any jurisdiction in which the making of the Offer
would violate applicable laws or regulations or would require actions which the
Offeror in its reasonable opinion, after having consulted with the Company,
deems unduly burdensome.

Board recommendation

The Offeror and Quantafuel have entered into a transaction agreement regarding
the Offer, pursuant to which the Board supports and has unanimously agreed to
recommend the Offer. After having consulted the Company’s financial advisor, ABG
Sundal Collier ASA, the Board believes that the Offer is fair from a commercial
and financial point of view to the shareholders of Quantafuel and that the Offer
Price represents the highest potential value for the shareholders compared to
other solutions available, based on inter alia: (i) the broad strategic review
conducted since 12 October 2022 which after discussions with various potential
strategic/financial players has resulted in the Offer; (ii) the Company’s
challenging financial situation, including the large short-term liquidity
shortfall and the need to secure funds before mid Q2 2023 to continue its
operations; (iii) the understanding of the Board that the Company’s largest
shareholders, including KIRKBI and BASF, will not participate in an equity
increase or debt financing (please see "Pre-acceptances" below), and that (iv)
subject to the outcome of the Offer, the Offeror is committed to secure the
Company’s short-term financing need as well as invest in the Company to finance
new growth projects. The Board notes that Viridor is motivated to build on the
platform that the Company has created and support it to deliver its long-term
vision and commercialisation of its technology. The Board has further considered
the conditional term loan facility to be made available by an affiliate of the
Offeror as further described below.

If the condition for acceptance of 90% of the Offer is not met or waived by the
Offeror by the end of the Offer Period, the Board will have to consider
alternative options to provide the Company with a short-term financing solution.
The Board will closely monitor the liquidity situation and, inter alia, consider
the following alternatives: i) to carry out an equity raise in accordance with
existing authorisation granted to the board or subject to an extraordinary
general meeting, ii) a potential sale of major assets or iii) a full liquidation
of the Company. Based on foreseeable market conditions, the financial situation
of the Company and lack of support for further equity from the Company’s largest
shareholders, the Board supported by its financial advisor does not currently
deem an equity raise as a viable solution.

The Board shall not amend or withdraw its recommendation of the Offer unless it
receives a bona fide superior competing offer fulfilling certain pre-agreed
terms. A withdrawal of the board recommendation would not entitle the
shareholders who have pre-accepted the Offer to withdraw their pre-acceptances
(see below). If the Offer is not completed due to inter alia the Board
withdrawing or amending its recommendation of the Offer, Quantafuel will
compensate the Offeror for its external advisor costs up to a maximum amount of
GBP 2.945 million.

Pre-acceptances

The two largest shareholders of the Company, KIRKBI Invest A/S and BASF
Antwerpen N.V., owning 17,888,880 Shares (approx. 10.8%) and 15,769,561 Shares
(approx. 9.5%), respectively, as well as all members of the Board and executive
management who hold Shares, in aggregate representing approximately 20.9% of the
Shares, have irrevocably pre-accepted the Offer. Such pre-acceptances are
irrevocable and unconditional and may not be withdrawn under any circumstances,
including but not limited to (a) the announcement of a competing offer for the
Shares at a higher offer price than the Offer Price or (b) the withdrawal by the
Board of its recommendation of the Offer. The pre-acceptances shall
automatically lapse if (i) the Offer Period has not commenced on or prior to 8
March 2023, (ii) the Transaction Agreement is terminated, (iii) the Offeror
announces publicly that it will not complete the Offer, or (iv) the Offeror has
not announced that the conditions to the Offer (other than conditions which will
continue to apply until completion of the Offer) have been satisfied or waived
by 1 August 2023 (as extended, if applicable).

Compulsory acquisition and de-listing from Euronext Growth

The Offeror intends to make a compulsory acquisition of the remaining Shares in
Quantafuel following settlement of the Offer. Furthermore, following settlement
the Offer, the Offeror intends to propose to the general meeting of Quantafuel
that an application for delisting of the Shares from Euronext Growth is filed
with the Oslo Stock Exchange.

CONDITIONAL TERM LOAN FACILITY

Quantafuel has entered into a non-binding term sheet for a term loan facility
with Viridor Limited or an affiliate thereof (as “Lender”) in the amount of up
to NOK 250 million (the “Facility”) with maturity date on 31 March 2024 (subject
to up to two 6 month extensions in the sole discretion of the Lender). Subject
to certain conditions, the Company may utilise the Facility from the date on
which the UK Competition Markets Authority (the “UKCMA”) indicates that it has
no further questions in relation to the potential acquisition contemplated by
the Offer or after 30 days have elapsed since the submission of the briefing
paper to UKCMA (whichever is earlier), unless, at the expiry of such 30 days’
period, there are any indications that the UKCMA may have further questions or
may wish to further investigate the case.

The purpose of the Facility is initially to finance repayment of the Quantafuel
group's existing third party indebtedness and thereafter to finance certain
development costs and construction (subject to capped amounts) and other general
corporate purposes subject to prior consent from the Lender. The Facility will
be secured with share pledges over certain companies in the Quantafuel group,
assignment of intercompany loans and other asset security as well as upstream
guarantees from certain subsidiaries. Any amount drawn under the Facility shall
carry an interest rate (PIK) of 8.00% per annum (which will be capitalised and
added to the principal amount of the Facility at the end of each interest
period). Additionally, Quantafuel shall pay a commitment fee of 2.50% per annum
of any undrawn commitments under the Facility (which will be capitalised and
added to the principal amount of the Facility on a monthly basis).

The Facility will be subject to customary undertakings, including, but not
limited to, restrictions on distributions, disposals, mergers, acquisitions and
joint ventures, loans, guarantees and financial indebtedness and negative
pledge. The Lender's commitment under the Facility may be cancelled and all
outstanding loans may become immediately due and payable by the Company if the
Board withdraws its recommendation of the Offer, upon a change of control in the
Company (other than by Viridor or an affiliate thereof) or in the event of a
sale of all of the Group's assets.

ADVISERS

ABG Sundal Collier ASA is acting as financial advisors and Wikborg Rein
Advokatfirma AS is acting as legal advisor to Quantafuel.

Macquarie Capital is acting as financial advisor to the Offeror, DNB Markets, a
part of DNB Bank ASA, is acting as domestic financial advisor and receiving
agent to the Offeror in connection with the Offer. Simpson Thacher & Bartlett
LLP and Advokatfirmaet Wiersholm AS are acting as legal advisors to the Offeror.


* * *

For further queries, please contact:
Lars Rosenløv, CEO +47 93018040
Christian Bekkevold Nilsen, CFO +47 90277833

About Quantafuel | https://quantafuel.com
Quantafuel is a technology-based energy company converting waste plastics back
into low-carbon synthetic oil products replacing virgin oil products. Quantafuel
is establishing, operating and owning dedicated plastic-to-liquid (PtL) plants
and plans to establish several plants throughout Europe and beyond.

This information is considered to be inside information pursuant to the EU
Market Abuse Regulation and is subject to the disclosure requirements pursuant
to section 5-12 the Norwegian Securities Trading Act.

This stock exchange announcement was published by André Moe Bakke, IR, on 28
February 2023 at 13:45 CET.

* * *

IMPORTANT NOTICE

The Offer and the distribution of this announcement and other information in
connection with the Offer may be restricted by law in certain jurisdictions.
When published, the Offer Document and related acceptance forms will not and may
not be distributed, forwarded or transmitted into or within any jurisdiction
where prohibited by applicable law, including, without limitation, Canada,
Australia, New Zealand, South Africa, Hong Kong and Japan. The Offeror does not
assume any responsibility in the event there is a violation by any person of
such restrictions. Persons into whose possession this announcement or such other
information should come are required to inform themselves about and to observe
any such restrictions.

This announcement is not a tender offer document and, as such, does not
constitute an offer or the solicitation of an offer to acquire the Shares.
Investors may accept the Offer only on the basis of the information provided in
the Offer Document. Offers will not be made directly or indirectly in any
jurisdiction where either an offer or participation therein is prohibited by
applicable law or where any tender offer document or registration or other
requirements would apply in addition to those undertaken in Norway.

Notice to U.S. Holders

U.S. Holders (as defined below) are advised that the Shares are not listed on a
U.S. securities exchange and that the Company is not subject to the periodic
reporting requirements of the U.S. Securities Exchange Act of 1934, as amended
(the "U.S. Exchange Act"), and is not required to, and does not, file any
reports with the U.S. Securities and Exchange Commission (the "SEC") thereunder.
The Offer will be made to holders of Shares resident in the United States ("U.S.
Holders") on the same terms and conditions as those made to all other holders of
Shares in the Company to whom an offer is made. Any information documents,
including the Offer Document, will be disseminated to U.S. Holders on a basis
comparable to the method that such documents are provided to the Company’s other
shareholders to whom an offer is made. The Offer will be made by the Offeror and
no one else. The Offer will be made to U.S. Holders pursuant to Section 14(e)
and Regulation 14E under the U.S. Exchange Act as a "Tier II” tender offer, and
otherwise in accordance with the requirements of Norwegian law. Accordingly, the
Offer will be subject to disclosure and other procedural requirements, including
with respect to the offer timetable, settlement procedures and timing of
payments, that are different from those that would be applicable under U.S.
domestic tender offer procedures and law.

Pursuant to an exemption from Rule 14e-5 under the U.S. Exchange Act, the
Offeror and its affiliates or brokers (acting as agents for the Offeror or its
affiliates, as applicable) may from time to time, and other than pursuant to the
Offer, directly or indirectly, purchase or arrange to purchase, Shares or any
securities that are convertible into, exchangeable for or exercisable for such
Shares outside the United States during the period in which the Offer remains
open for acceptance, so long as those acquisitions or arrangements comply with
applicable Norwegian law and practice and the provisions of such exemption. To
the extent information about such purchases or arrangements to purchase is made
public in Norway, such information will be disclosed by means of an English
language press release via an electronically operated information distribution
system in the United States or other means reasonably calculated to inform U.S.
Holders of such information.

Neither the SEC nor any securities supervisory authority of any state or other
jurisdiction in the United States has approved or disapproved the Offer or
reviewed it for its fairness, nor have the contents of the Offer Document or any
other documentation relating to the Offer been reviewed for accuracy,
completeness or fairness by the SEC or any securities supervisory authority in
the United States. Any representation to the contrary is a criminal offence in
the United States.

More information:
Access the news on Oslo Bors NewsWeb site

583850_Board recommendation.pdf
583850_Press release.pdf