Enedo Plc Stock Exchange Release November 2, 2021 at 19:00 (Insider information)
Enedo Plc has received a positive conditional credit decision on EUR 5 million loan arrangement, calls for EGM and updates on the financial position
In the Q3 business review on October 27, 2021, Enedo Plc commented on the turnaround program and that Enedo Plc needs to strengthen the liquidity in order to financially manage the transition period and implement the turnaround program, since it has shown to be more challenging than anticipated, both in time and financially. Enedo Plc also commented that the company is under discussions with various financial institutions on the loan arrangement. The turnaround program is estimated to cost around EUR 4 million until end of the first quarter next year.
Furthermore, in Enedo Plc´s Stock Exchange Release November 26, 2021, Enedo commented that Enedo Plc has signed a short-term bridge loan with Inission Ab for minimum EUR 1 million and which can be increased up to EUR 2 million upon separate agreement by the parties, since Enedo Plc has been under cash constraint and been in need for strengthening the liquidity and the financial position, and to finalize the turnaround program to turn into a profitable company. The bridge loan will become due upon first drawdown of the below EUR 5.0 million loan, however on 31 December 2021 at the latest.
Enedo Plc’s financial situation continues to be difficult and the net sales and Ebit will be lower than last year. The overdue trade payables were approximately EUR 2.0 million on 30th November before using the bridge loan to settle overdue payables.
The company's cash and cash equivalents as per 30th November are EUR 1.6 million after receival of the first instalment of EUR 1.0 million of the bridge loan.
In order to ensure the company’s continuity beyond the short-term bridge loan, Enedo Plc has applied for and received a positive credit decision for EUR 5.0 million loan from a financial institution. The loan would be used to repay the above bridge loan, pay the company’s overdue trade payables and pay the costs to complete the company’s turnaround program. One of the loan terms would be Inission Ab providing a guarantee for the total outstanding loan amount (including interests and expenses). Should Inission Ab become liable to pay the loan based on the guarantee, then Inission Ab would have a right of recourse against the company. Should the company be unable to pay the said amount to Inission Ab upon demand, Inission Ab shall then be entitled to convert the said amount to the shares in Enedo Plc at EUR 0,10 per share.
The loan arrangement is subject to EGM authorizing Board of Directors to issue a maximum number of 55,000,000 new shares to be offered for subscription by Inission Ab at a subscription price of EUR 0,10 per share. Right to share subscription can only be used if and to the extent Inission Ab is liable to pay Enedo Plc´s loans based on the guarantee and Enedo Plc is unable to repay the said amount to Inission Ab upon demand in which case Inission Ab could then convert the said amount to new shares in Enedo Plc.
The loan arrangement is also subject to the Financial Supervisory Authority granting Inission Ab a permanent exemption from the mandatory tender offer obligation pursuant to Chapter 11, Section 26 of the Securities Markets Act even if Inission Ab’s ownership would increase to up to 72.1% as a result of Inission Ab converting its recourse receivables based on the above guarantee to new shares in the company.
The EUR 5 million loan arrangement has a maturity date of 30th September 2022. The company does not expect to be able to repay the loan on such maturity date from its operating cash-flow. However, based on the current strong order intake and reduced future cost levels due to the turnaround program the company aims to either (i) agree with the loan provider to prolong the maturity date or (ii) negotiate a new loan with some other financing institution and / or (iii) to raise sufficient equity financing to repay the loan.
Notice to the EGM will be published by a separate stock exchange release.
ENEDO PLC
Mikael Fryklund
President and CEO
For further information please contact Mr. Mikael Fryklund, CEO, tel. +358 40 500 6864.
DISTRIBUTION
Nasdaq Helsinki Ltd
Principal media
Enedo
Enedo is a European designer and producer of high-quality electronic power supplies and systems for critical equipment even in the most demanding environments. Enedo´s mission is to make electricity better – more reliable, more secure, more energy efficient – and just right to fit its purpose. Enedo´s three main product categories are Led Drivers, Power supplies and Power Systems. In 2020 the group´s revenue was EUR 38,5 million. Enedo has 354 employees, and its main functions are located in Finland, Italy, Tunisia and USA. The group´s head office is in Finland and parent company Enedo Oyj is listed on Nasdaq Helsinki Oy.
www.enedopower.com
