Otovo signs term sheet for sale of subscription portfolio

24 Oct 2024 08:58 CEST

Today, on 24 October 2024, Otovo ASA ("Otovo" or the "Company") has signed a
term sheet with an undisclosed asset investor (the "Buyer”) for the sale of the
Company’s subscription portfolio in Germany, Austria, Poland, Netherlands,
Belgium, France, Spain and Portugal (the "Continental Markets").

The prospective transaction (the "Transaction") covers (i) the sale of all
existing subscription assets built in the Continental Markets in from 2020 until
Q1 2025, and (ii) an obligation for the Buyer to purchase new subscription
contracts originated by Otovo in the Continental Markets on pre-agreed terms in
2025 and 2026 (the "Forward Flow Period"). The Transaction is expected to close
in Q1 2025.

The Transaction is structured as a sale where Otovo’s subscription SPVs in the
Continental Markets will be transferred to a newly established holding company
(the "HoldCo") ahead of closing. Otovo will retain an ownership stake of about
12% in the HoldCo which is estimated to fall to 8% at the completion of the
Forward Flow Period, as assets in the Forward Flow Period are funded with 5%
retained equity.

The estimated transaction value at closing is EUR 56m (NOK 664m), and will
release approximately EUR 15m (NOK 173m) in cash to the Company after repayment
of debt, and net of EUR 6m (NOK 76m) in retained equity.

The parties have agreed that the Buyer will at closing receive 55.9m warrants in
Otovo, each holding the right to subscribe for one new share at a strike price
of NOK 1.15 per share.

– This flips the cash flows from leasing activities. We receive a substantial
cash gain from the sale of our portfolio of existing assets and move into a
simpler existence in which we no longer invest cash, but rather sell and earn as
we go. That is of course a defining event for Otovo, says Otovo CEO Andreas
Thorsheim.

The subscription projects sold at closing have a mark-up of 1.33x versus
installer COGS. In the Forward Flow Period Otovo will sell subscription projects
to the Buyer for a consideration of 1.47x versus installer COGS, where 95% will
be released as cash within three months and the remaining 5% will be retained as
equity and paid out over the contract period.

After the transaction closes Otovo will have three revenue streams, all of which
are recognized at time of installation:
* Direct sales to consumers
* Forward flow sales in Norway and Sweden
* Forward flow sales in the Continental Markets
Prior to entering the forward flow agreements, subscription projects have not
been recognized in reported financials, and required cash equity investments for
every project. The forward flow sales will instead release cash in relation to
installation activity.

– In combination with the cost programme we have run this autumn we are now
robust and ready for 2025 whether the market rebound comes quickly or takes
time, adds Thorsheim.

The Transaction is subject to Otovo and the Buyer entering into final
transaction agreements, and closing of the transaction will be subject to
customary closing conditions including due diligence, financing and necessary
approvals.



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For further queries, please contact:

Andreas Thorsheim, Chief Executive Officer
Phone: +47 93 06 51 78

Petter Ulset, Chief Financial Officer
Phone: +47 47 93 60 26 43

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

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About Otovo: For homeowners, Otovo is the easiest way to get solar panels on the
roof, and batteries in the home. Otovo is a marketplace that organizes hundreds
of local, high quality and qualified energy installers. The company uses its
proprietary technology to analyze the potential of any home and finds the best
price and installer for customers based on an automatic bidding process between
available installers.

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