Following negotiations between holders of convertible loan notes (the “Holders”), representing approximately SEK 72.9 million including aggregated interest, and the board of directors of Hoylu AB (publ) (“Hoylu” or the “Company”), the Holders have committed to participate in a rights issue and to offset all claims for newly issued shares at a subscription price per share of SEK 0.10 (the “Rights Issue”). In order to further strengthen the balance sheet Alden AS, TTC Invest AS, Fougner Invest AS and Windchange Invest AB have each undertaken to subscribe for an additional amount of up to SEK 2.5 million in the Rights Issue. The Rights Issue will thereby be fully secured. A notice to an extraordinary general meeting will be published in a separate press release. A prospectus will also be prepared by the Company for the Rights Issue.

The outstanding claim

The board of directors in Hoylu has reached an agreement with all the Holders to waive the Holders’ right to convert the convertible loan notes into shares and to claim repayment of the outstanding loan in accordance with the terms and conditions for the outstanding convertible notes in the Company (the “Agreement”). The wavier means that the Holders will have a claim against the Company amounting to the nominal value of the convertible loan notes plus interest. Interest for the convertible loan notes will be accumulated up until, and including, 28 February 2023 (the “Maturity Date”). The total claim, including aggregated interest, will amount to approximately SEK 72.9 million on the Maturity Date. No additional interest will accumulate for claims after the Maturity Date provided that the shareholders approve the board of directors’ proposal on the contemplated Rights Issue.

The contemplated Rights Issue

The contemplated Rights Issue will provide Hoylu with approximately SEK 82.6 million, before transaction related costs. All existing shareholders will receive one (1) subscription right for each share owned on the record date, 31 March 2023. One (1) subscription right gives the right to subscribe for nine (9) shares. The subscription price for each share in the contemplated Rights Issue will amount to SEK 0.10. The contemplated Rights Issue entails an issue of a maximum of 825,695,298 shares. In view of the processing time for the prospectus that the Company will prepare for the contemplated Rights Issue, the board of directors will propose to the extraordinary general meeting that the subscription period shall commence two trading days after the date on which the Swedish Financial Supervisory Authority (the “SFSA”) approves the prospectus and run for a period of 14 days. The final day of the subscription period shall fall on a trading day. The Company will provide a timetable for the subscription period in connection with the approval of the prospectus.

Subscription commitments and underwriting commitments

Through the Agreement, the Holders have undertaken to participate in the contemplated Rights Issue and subscribe for newly issued shares and pay for the subscribed shares through set-off against each Holders’ claims. The total commitment from the Holders amount to approximately SEK 72.9 million.

In order to further strengthen the balance sheet of the Company Alden AS, TTC Invest AS, Fougner Invest AS, and Windchange Invest AB have each undertaken to subscribe for an additional amount of up to SEK 2.5 million in the contemplated Rights Issue. The contemplated Rights Issue will thereby be fully secured. The Holders are not entitled to receive any compensation for their commitments and undertakings to subscribe for the shares in the contemplated Rights Issue.

After the contemplated Rights Issue, all outstanding claims under the convertible loan notes in the Company will have been offset against newly issued shares.

Over-allotment option

To enable further capital contributions, the board of directors intends to propose to the extraordinary general meeting a resolution to authorise the board of directors to resolve on an over-allotment issue in addition to the contemplated Rights Issue of up to approximately SEK 12.4 million. If the shareholders approve the proposal from the board of directors on the over-allotment option, and if the over-allotment option is fully exercised, the number of shares in the Company will increase by an additional 123,385,429.

Extraordinary general meeting
For the purpose of deciding on i) the contemplated rights issue, ii) a resolution on lowering the share capital in the Company by approximately SEK 6,645,839.79 to SEK 917,439.22 to achieve a quota value for the Company’s shares of SEK 0.01 iii) amending the limits for the number of shares in the company and the share capital in the articles of association, and iv) authorising the board of directors to resolve on the over-allotment option, the board of directors intends to convene an extraordinary general meeting to be held on 22 March 2023. The notice to the extraordinary general meeting will be published through a separate press release.

The Agreement includes an undertaking for the Holders to vote in favour for the contemplated Rights Issue and the thereto related resolutions.

Background and purpose for the contemplated Rights Issue

The background and purpose for the contemplated Rights Issue is that the Company needs to clear its debts and strengthen the balance sheet in order to realise expansion plans and increase growth.

Prospectus
A prospectus will be prepared in connection with the contemplated Rights Issue and will, following approval by the SFSA, be available on the Company’s website prior to the subscription period of the contemplated Rights Issue.

Shares, share capital and dilution

Through the contemplated Rights Issue, the number of shares may increase with a maximum of 825,695,298 shares from 91,743,922 shares to 917,439,220. After the contemplated Rights Issue, and the lowering of the share capital, the share capital may increase by a maximum of SEK 8,256,952.98 from SEK 917,439.22 to SEK 9,174,392.20. The dilution effect for existing shareholders who chooses not to participate in the Rights Issue amounts to approximately 90.00 per cent.

Indicative timetable

We are very happy to have reached this agreement with the holders of the convertible notes in the company. This proposed rights issue will result in a clean slate for Hoylu in terms of debt and greatly strengthen our balance sheet. We are also very happy about the level of trust shown in the Company by some of the existing shareholders, resulting in the rights issue being fully secured. Says CEO, Truls Baklid.

For more information, please contact:

Truls Baklid, CEO Hoylu AB
Tel: +47 924 38 900
Email: tob@hoylu.com

Certified Adviser:

Mangold Fondkommission AB, +46 (0) 8 50 301 550, ca@mangold.se

About Hoylu

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For more information: www.hoylu.com
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Publication
This information is information that Hoylu AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 21:00 CET on February 13, 2023.