Hemfosa announces terms for rights issue

Hemfosa Fastigheter AB (publ) (”Hemfosa” or ”the Company”) announced March 15, 2016 that the Board of Directors has resolved to, subject to the approval by the Annual General Meeting, launch a rights issue of ordinary shares of approximately SEK 1,800m with preferential rights for holders of ordinary shares. Hemfosa’s Board of Directors announces today the terms for the rights issue.

Rights issue in short:

•  Holders of ordinary shares in Hemfosa have preferential right to subscribe for one (1) new ordinary share per five (5) existing ordinary shares, i.e. an issue ratio of 1:5
• The subscription price is SEK 69.00 per ordinary share, which amounts to a maximum issue proceeds of approximately SEK 1,814 before issue costs  
• The rights issue includes subscription undertakings and intentions to subscribe from existing shareholders corresponding to 36.9 per cent of the rights issue
• The rights issue is subject to approval by the Annual General Meeting on April 19, 2016
• Since Hemfosa pays quarterly dividends, the new ordinary shares will, until the next Annual General Meeting, entitle to three quarterly dividends of SEK 1.05 each

Reasons for the rights issue

Hemfosa sees continued interesting business opportunities, despite the currently strong transaction market. The Company’s clear focus on community service properties with stable cash flows and a reputable position as a knowledgeable counterparty within the community sector enables a strong platform for future acquisitions and continued growth.

The Board of Directors of Hemfosa deems that a rights issue of ordinary shares with preferential rights for holders of ordinary shares implies improved financial possibilities for continued growth while maintaining an appropriate proportion of equity. The proceeds are intended for property acquisitions which are continuously evaluated by the Company in its day-to-day operations as well as for investments in the existing property portfolio.

Terms and conditions for the rights issue

Those who are registered by Euroclear Sweden AB as ordinary shareholders in Hemfosa on the record date April 21, 2016 have preferential rights to subscribe for new ordinary shares. For each ordinary share held in Hemfosa one (1) subscription right is obtained. The subscription rights entitle the holder to subscribe for ordinary shares, and five (5) subscription rights entitle to subscription of one (1) new ordinary share. In addition, investors are offered to subscribe for ordinary shares without subscription rights. In the event that all shares are not subscribed for with subscription rights, the Board of Directors shall decide on allotment of shares subscribed for without the exercise of subscription rights.

The record date of Euroclear Sweden AB for determining which holders of ordinary shares who are entitled to receive subscription rights is April 21, 2016. The ordinary shares are traded including the right to participate in the rights issue up to and including April 19, 2016.

The subscription price is SEK 69.00 per new ordinary share. Assuming that the rights issue is fully subscribed, the share capital will be increased by SEK 13,144,020.50 by a new issue of 26,288,041 ordinary shares. Assuming full subscription, the total issue proceeds amounts to approximately SEK 1,814m before issue costs.

Subscription of new ordinary shares shall be made during the period from and including April 26, 2016 up to and including May 10, 2016. Hemfosa’s Board of Directors has the right to extend the subscription period. Any extension will be published by Hemfosa no later than May 10, 2016.

Holders of ordinary shares who choose not to participate in the rights issue will have their ownership diluted by approximately 16 percent, but are able to financially compensate for this dilution by selling their subscription rights.

The rights issue is subject to approval by the Annual General Meeting which will be held April 19, 2016 at 15:00 at Hotel Rival, Mariatorget 3 in Stockholm. Notice of Annual General Meeting was published March 15, 2016 and is available on Hemfosa’s website.

The Board of Directors has proposed that the Annual General Meeting held on April 19, 2016, resolves that, until the next Annual General Meeting, a dividend to the shareholders of ordinary shares shall be paid in a total amount of SEK 4.20 per ordinary share, with quarterly payments of 1.05 per ordinary share. Proposed record days for the quarterly dividends on the ordinary shares are April 21, 2016, July 10, 2016, October 10, 2016 and January 10, 2017. The Board of Directors has further proposed that the new ordinary shares that may be issued pursuant to the Board’s rights issue resolution shall entitle to dividend as set out above as of the day on which they are entered in the share register maintained by Euroclear Sweden AB. This involves that new ordinary shares will carry the right to, until the Annual General Meeting 2017, three quarterly dividends of 1.05 per ordinary share, totaling SEK 3.15 per ordinary share.

Shareholder support

The Fourth Swedish National Pension Fund (AP4) and the Second Swedish National Pension Fund (AP2), representing 10.1 per cent and 1.7 per cent of the ordinary shares, respectively, have committed to subscribe for their pro rata shares in the rights issue. Hemfosa’s chairman Bengt Kjell and CEO Jens Engwall, representing 1.6 per cent and 2.2 per cent of the ordinary shares, respectively, have committed to subscribe for at least two thirds of their pro rata shares in the rights issue.

In addition, Kåpan Pensioner, AMF, Lannebo Fonder, Handelsbanken Fonder och Swedbank Robur, whom together hold 20.8 per cent of the ordinary shares, have expressed their support for the rights issue and their intention to subscribe for their pro rata shares in the rights issue. Hemfosa’s CFO Karin Osslind, Head of Business Development Mikael Weiland and one of the founders Lars Thagesson, whom together holds 2.7 per cent of the ordinary shares, have expressed their intention to subscribe for at least two thirds of their pro rata shares in the rights issue.

In total, the subscription undertakings and intentions to subscribe corresponds to 36.9 per cent of the rights issue.

The above mentioned shareholders have committed or expressed their intention to vote in favor of the rights issue at the Annual General Meeting.

Indicative timetable for the rights issue

Financial and legal advisors

SEB Corporate Finance and Swedbank Corporate Finance are acting as financial advisor and Advokatfirman Cederquist as legal advisor to Hemfosa in connection to the rights issue.

Nacka April 14, 2016

Hemfosa Fastigheter AB (publ)

The Board of Directors

Hemfosa AB (publ) discloses the information in this press release according to the Swedish Securities Markets Act and/or the Swedish Financial trading Act. The information was provided for public release on April 14, 2016 at 07:30 a.m.

About Hemfosa Fastigheter

Hemfosa is a Swedish property company with a property portfolio focused on service properties in the Nordics. This generates stable revenue flows and a healthy yield. Hemfosa also aims to create value by actively participating in the transaction market. As of December 31, 2015, Hemfosa owned commercial properties with a total property value of approximately SEK 32.6 billion, including the Company’s share of the property value in joint ventures. The Company’s ordinary share is listed as of March 2014 and preference share since December 2014, both on Nasdaq Stockholm. Read more at www.hemfosa.se.

IMPORTANT NOTICE

This press release does not contain or constitute an invitation or an offer to acquire, sell, subscribe for or otherwise trade in shares, subscription rights or other securities in Hemfosa. Invitation to the persons concerned to subscribe for shares in Hemfosa will only be made through the prospectus that Hemfosa intends to publish at Hemfosa’s website, following the approval and registration by the Swedish Financial Supervisory Authority (Sw. Finansinspektionen). The prospectus will contain, among other things, risk factors, financial statements as well as information regarding Hemfosa’s Board of Directors. This press release has not been approved by any regulatory authority and is not a prospectus, accordingly investors should not subscribe for or purchase any securities referred to in this press release except on the basis of information provided in the prospectus to be published by Hemfosa.

In certain jurisdictions, the publication or distribution of this press release may be subject to restrictions according to law and persons in those jurisdictions where this press release has been published or distributed should inform themselves about and abide by such restrictions.

This press release is not directed at persons located in the United States (including its territories and possessions, any state of the United States and the District of Columbia), Canada, Australia, Hong Kong, Japan, New Zealand, Singapore, South Africa or in any other country where the offer or sale of the subscription rights, paid subscribed shares (Sw. betalda tecknade aktier) or new shares is not permitted. This press release may not be announced, published or distributed, directly or indirectly, in or into the United States, Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, South Africa or any other country where such action is wholly or partially subject to legal restrictions or where such action would require additional prospectuses, other offer documentation, registrations or other actions in addition to what follows from Swedish law. Nor may the information in this press release be forwarded, reproduced or disclosed in such a manner that contravenes such restrictions or would require such additional prospectuses, other offer documentation, registrations or other actions. Failure to comply with this instruction may result in a violation of the United States Securities Act of 1933, as amended (the “Securities Act“) or laws applicable in other jurisdictions.

In addition, if and to the extent that this press release is communicated in any European Economic Area member state that has implemented Directive 2003/71/EC (together with any applicable implementing measures, including Directive 2010/73/EC, in any member state, the “Prospectus Directive“), this press release is only addressed to and directed at persons in that member state who are “qualified investors” within the meaning of the Prospectus Directive and must not be acted on or relied on by other persons in that member state. This press release does not constitute a prospectus within the meaning of the Prospectus Directive or an offer to the public.

In the United Kingdom, this press release is being distributed only to, and is directed only at (i) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Financial Promotion Order“), (ii) persons falling within Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the Financial Promotion Order, or (iii) other persons to whom it may otherwise be lawfully communicated (all such persons together being referred to as “relevant persons“). This press release is directed only at relevant persons and must not be acted on or relied on by anyone who is not a relevant person.

No subscription rights, paid subscribed shares or new shares have been or will be registered under the Securities Act, or with any other securities regulatory authority of any state or other jurisdiction of the United States and no subscription rights, paid subscribed shares or new shares may be offered, sold, resold, transferred, delivered or distributed, directly or indirectly, into or within the United States or on account of such persons other than pursuant to an exemption from, or in a transaction not subject to the registration requirements of the Securities Act, and in compliance with any applicable securities laws of any state or jurisdiction of the United States. There is no intention to register any securities referred to herein in the United States or to make a public offering of the securities in the United States.

For more information, please contact:

Bengt Kjell, Chairman of the Board, Tel: +46 705 94 5398

Jens Engwall, CEO, [email protected], Tel: +46 706 90 6550, Switchboard: +46 8 448 04 80