Swiss Steel Holding AG plans capital increase to strengthen its equity and improve its existing financing and credit terms Dienstag, 01. Dezember 2020 - 07:00

Media release

FOR RELEASE IN SWITZERLAND – NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN.

• Swiss Steel Holding AG publishes invitation to the Extraordinary General Meeting on December 22, 2020, to resolve on an ordinary capital increase with gross proceeds of around EUR 200 million while preserving shareholders' subscription rights
• Connected thereto lending banks have agreed to significant reliefs under existing syndicated loan, which will lead to more entrepreneurial freedom and considerable cost savings
• Targeted minimum gross proceeds of EUR 200 million secured by commitment of BigPoint Holding AG to subscribe for new shares not subscribed for or otherwise placed with other shareholders or investors at a price of CHF 0.21 per share (backstop)
• Strengthening of financing and improvement of equity ratio increase resilience in a challenging economic environment
• Jens Alder will step down as Chairman of the Board of Directors of Swiss Steel Holding AG and leave the Board at December 22, 2020. The Board of Directors appoints Vice Chairman Heinrich Christen as the new Chairman for the remaining term until the AGM 2021

Lucerne, December 1, 2020 – Swiss Steel Holding AG today invited to an Extraordinary General Meeting (EGM) on December 22, 2020. The single item on the agenda is the proposal by the Board of Directors to resolve on an ordinary capital increase through issuance of new registered shares while preserving shareholders' subscription rights. The capital increase to be resolved by the EGM targets gross proceeds of at least EUR 200 million.

The Company has been able to agree considerable reliefs with its lending banks under the existing syndicated loan. This concerns the contractual terms, the restructuring measures imposed and significant associated costs and risks for the Company. The aforementioned reliefs are subject to the condition that the Company raises the targeted minimum gross proceeds of EUR 200 million in the capital increase.

In the ordinary capital increase, each shareholder will be granted pro rata to its shareholding rights to subscribe for new registered shares at market conditions. In order to ensure the targeted minimum proceeds of EUR 200 million, the main shareholder BigPoint Holding AG has committed to exercise all of its subscription rights in the capital increase.

In addition, if and to the extent that any other shares offered in the capital increase are not taken up by other shareholders or investors at the price of at least CHF 0.21, BigPoint Holding AG has committed to also subscribe for these shares at said minimum price (backstop). Thereby, the targeted minimum gross proceeds of EUR 200 million will be secured. At the same time, shareholders who do not wish to exercise their subscription rights will be protected against excessive dilution because the subscription price for all shares from the capital increase will be at least CHF 0.21.

The subscription price for the new registered shares will be determined by the Board of Directors after the end of the subscription rights exercise period based on market conditions, taking into account the number of exercised subscription rights, the demand in the book building process and the backstop obligation of BigPoint Holding AG. If the subscription price, which will be determined by the Board of Directors, is above the backstop price, the Company may achieve gross proceeds of more than EUR 200 million. As usual for capital increases at market conditions, no subscription rights trading will take place.

The rights issue is expected to be executed in January 2021. Completion of the capital increase is also planned in January 2021.

The capital increase shall strengthen the balance sheet and improve the currently unsatisfactory equity ratio (10.9% as of September 30, 2020). It will also replace the current back-stop loan from BigPoint Holding AG of EUR 130 million and strengthen the financing position. At the same time, the Company will save considerable costs, reduce risks and regain entrepreneurial freedom as a result of the improved loan conditions. Overall this will significantly strengthen the Company's resilience in what remains a very challenging economic environment.

Now that the Board of Directors has decided to convene an Extraordinary General Meeting to approve the capital increase, Jens Alder considers his role as independent chairman to be fulfilled. During his term of office since April 2019, Swiss Steel Group has gone through deep crises, the markets for its products have shrunk and COVID-19 has led to a significant economic downturn. In addition, three shareholder groups had to be aligned in terms of their interest and targets relating to Swiss Steel Holding AG. Today our group has sufficient liquidity and with the capital increase it is expected to obtain sufficient equity to enable a healthy development of its business. With two strong shareholders holding at present in aggregate almost 75% of the capital, the shareholder base of the Company is stable. Jens Alder has therefore decided to step down as Chairman of the Board of Directors of Swiss Steel Holding AG effective December 22, 2020. The Board of Directors thanks Jens Alder for his great commitment as independent Chairman of the Board of Directors in the past, very challenging years. The Board of Directors has decided to appoint the current vice-chairman Heinrich Christen as the new chairman for the remaining term until the ordinary general meeting 2021.

CEO Clemens Iller commented: "The strengthening of our financing by way of additional equity and the significant improvement of our credit terms will send a strong message to our employees, customers and suppliers: Swiss Steel group is a reliable and solid partner for the long term. Our increased entrepreneurial freedom and resilience will offer an opportunity to further pursue the turnaround of our company in an economic environment, which continues to be challenging. The new equity financing will significantly reduce our interest expense and the modified credit terms and conditions will result in lower related costs of third parties. Such money can be spent elsewhere in a more targeted manner. We are very grateful for the continued support of our main shareholder and at the same time consider this as a clear commitment to our chosen path to turnaround.”

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For media inquiries:

Dr. Andrea Geile, a.geile@swisssteelgroup.com, tel +41 (0)41 581 4121

For analyst/investor inquiries:

Daniel Geiger, d.geiger@swisssteelgroup.com, tel +41 (0)41 581 4160

https://www.swisssteel-group.com

About Swiss Steel Group

The Swiss Steel Group is currently one of the world’s leading providers of customized solutions in the field of special long steel products. The Group is also one of the leading manufacturers in the global market for both tool steel and stainless long steel and is one of the two largest companies in Europe for alloyed and high-alloy engineering steel. With more than 10,000 employees at its own production and distribution companies in over 30 countries across five continents, the Company supports and supplies its customers around the globe and offers them a full worldwide portfolio from Production and Sales & Services. They benefit from the Company’s technological expertise, consistently high product excellence across the globe, and in-depth knowledge of local markets.

Disclaimer

This document is not an offer to sell or a solicitation of offers to purchase or subscribe for shares. This document is (i) not a prospectus within the meaning of Article 652a of the Swiss Code of Obligations, (ii) not a listing prospectus as defined in articles 27 et seqq. of the listing rules of the SIX Swiss Exchange AG or of any other stock exchange or regulated trading venue in Switzerland, (iii) not a prospectus within the meaning of the Swiss Financial Services Act and (iv) not a prospectus under any other applicable laws. Copies of this document may not be sent to jurisdictions, or distributed in or sent from jurisdictions, in which this is barred or prohibited by law. The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy, in any jurisdiction in which such offer or solicitation would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any jurisdiction. A decision to invest in securities of Swiss Steel Holding AG should be based exclusively on the issue and listing prospectus published by Swiss Steel Holding AG.

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The information contained herein does not constitute an offer of securities to the public in the United Kingdom. No prospectus offering securities to the public will be published in the United Kingdom. This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "FSMA Order") or (iii) persons falling within Articles 49(2)(a) to (d), "high net worth companies, unincorporated associations, etc." of the FSMA Order, and (iv) persons to whom an invitation or inducement to engage in investment activity within the meaning of Section 21 of the Financial Services and Markets Act 2000 may otherwise be lawfully communicated or caused to be communicated (all such persons together being referred to as "relevant persons"). The securities are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant per-sons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

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This publication contains forward-looking statements. Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may result in a substantial divergence between the actual results, financial situation, development or performance of Swiss Steel Holding AG and those explicitly or implicitly presumed in these statements. Against the background of these uncertainties, readers should not rely on forward-looking statements. Swiss Steel Holding AG assumes no responsibility to update forward-looking statements or to adapt them to future events or developments. Except as required by applicable law, Swiss Steel Holding AG has no intention or obligation to update, keep updated or revise this publication or any parts thereof (including any forward-looking statement) following the date hereof.