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ERRIA A/S Announces Completion
of First Round of Funding of DKK 7.2m
and Changes in Ownership
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1. Introduction
The board of directors (the “Board”) of Erria A/S (the “Company”) is pleased to announce that the Company has raised DKK 4,587,971.00 by way of issuance of new shares and DKK 2,668,529.00 by way of issuance of convertible notes. The aggregate capital raised is, therefore, DKK 7,256,500.00.
2. Background
As shown its announcement no. 10 of August 22, 2018 (the “Half-Year Result Announcement”), the Company and its subsidiaries and affiliates (collectively, the “Group”) suffered a net loss of DKK 8,868,000.00 during the first six months of 2018 against a revenue of DKK 52,394,000.00. This meant that, as of June 30, 2018, the shareholders’ funds of the Group were negative by DKK 8,556,000.00.
Pursuant to announcements no. 11 and 12 of August 29 and September 20, 2018, respectively (the “Capitalization Announcements”), in order to enhance the capital resources of the Group, the Board determined, in view of the loss, that it would initiate an effort to raise capital for the Company.
As described in greater detail below, the Board now wishes to announce that the Company has now successfully received and closed on capital commitments from existing shareholders as well as a third party for the issuance of new shares and convertible notes.
3. Share Subscription
- Acting under the authority of the September 20, 2018 shareholder resolution to issue up to 789,668 shares in the Company at a price equal to the 20-day weighted average as set out in the Capitalization Announcements, the Board wishes to announce that JPJ Invest Pte Ltd has subscribed to 789,668 shares. The net proceeds arising from this subscription are DKK 4,587,971.00.
- As a result, the authority of the Board under the Capitalization Announcements to issue new shares has been fully exhausted and no further shares are available for subscription.
4. Issuance of Convertible Notes
Acting under the authority of the September 20, 2018 shareholder resolution to issue convertible notes of up to DKK 20m as set out in the Capitalization Announcements, the Board wishes to announce that the Company, as the debtor, has entered into convertible notes, all carrying an annual rate of interest of six percent, in the following amounts and with the creditor parties immediately following the amount:
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- DKK 1,004,166.67 in favour of Ellegaard Holdings Pte Ltd, a Singapore company controlled by Peter Kristian Ellegaard, the chairman of the Board;
- DKK 1,002,333.33 in favour of Harbour Group Holding ApS, a Danish company controlled by Kristian Svarrer, a director of the Board;
- DKK 412,029.00 in favour of JPJ Invest Pte Ltd; and
- DKK 250,000.00 in favour of Per H. Knudsen.
Following the issuance by the Company of these convertible notes, the Board remains authorized to issue additional convertible notes of up to DKK 17,331,471.00 on the terms set out in the Capitalization Announcements.
5. Consequences of Issuance of Shares and Convertible Notes
Pursuant to the Half-Year Result Announcement, as of June 30, 2018, the shareholders’ funds of the Group amounted to minus DKK 8,556,000.00. Following the share issuance described in Section 3 above, the shareholders’ funds of the Group are minus DKK 3,968,029.00. If the nominal value of the convertible notes described in Section 4 above are included, the shareholders’ funds of the Group will be minus DKK 1,299,500.00.
6. Changes in Ownership
Pursuant to Section 30 of the Capital Markets Act, the Board further wishes to announce that, as a result of the share subscription described in Section 3 above, JPJ Invest Pte Ltd now holds more than 15 percent (but less than 20 percent) and C.C.N. Holding A/S less than five percent of the share capital of the Company.
7. Comments by the Board and Management
“We believe that our ability to secure these additional capital resources are testimony to the fact that our pursuit of strategic growth opportunities has been well received with the investor community,” says Peter Kristian Ellegaard. The funds will primarily be applied to grow Erria Containers A/S (under formation) and to strengthen the capital resources of the Company for its current business. The Company anticipates raising additional capital through the issuance of convertible notes to fund other strategic growth opportunities as they may arise and to further strengthen its capital resources.
“We are now actively executing a revised commercial strategy across our business units. This new strategy focuses on expanding relationships with current customers and securing new ones through a refined approach. The fruits of this effort are evident particularly in our container services business in Vietnam where we are seeing increased activity levels at several of our locations. However, the financial impact of this development will not manifest itself until 2019,” says Henrik N. Andersen, the group chief executive officer of the Company.
8. No Change in Outlook for 2018
As set out in the Half-Year Result Announcement, the Company lowered its expectations for the year 2018 to an EBITDA of minus DKK 6m to minus DKK 7m. The proceeds from the share subscription and convertible note schemes are not expected to have a material impact on the outlook for 2018.
Peter Kristian Ellegaard Henrik N. Andersen
Chairman of the Board Group Chief Executive Officer
For further information, please contact Henrik N. Andersen by phone at +45 3336 4400.
Headquartered in Denmark, Erria A/S is an international marine and logistics services company with operations in Denmark, Vietnam, Ghana and Venezuela. With nearly 300 employees and associates across the world, the Erria Group every day serves the needs of container shipping companies, ship owners and several other actors in the shipping and logistics sector. The Erria A/S stock is traded at the NASDAQ First North Denmark platform (Bloomberg code: ERRI:DK – ISIN: DK0060101483).
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