Issue of new common shares, information brochure

Information to ordinary
shareholders in Eniro
Eniro has decided to carry out a new issue of ordinary shares in which you as a n ordinary shareholder in Eniro
have preferential right to participate
The application
for subscription must
be submitted between
March 16 and
March 30,
2015
This Brochure is not, nor should be considered, a prospectus under prevailing
­legislation and rules. The Prospectus, which has been approved and registered
by the Swedish Financial Supervisory Authority, has been published and is
­available on Eniro’s website, www.enirogroup.com, and on SEB’s website,
www.sebgroup.com/prospectuses. The Prospectus includes information about
Eniro, the Rights Issue and the risks associated with an investment in Eniro and
participation in the Rights Issue. The Brochure is not intended to replace the
Prospectus as a basis for decisions to subscribe for ordinary shares in Eniro, nor
does it constitute a recommendation to subscribe for ordinary shares in Eniro.
Information to ordinary shareholders in Eniro AB (Publ)
2
Important information
The Brochure is a simplified description of Eniro’s new
issue of a maximum of 305,642,220 new ordinary shares
with preferential rights for existing shareholders of ordinary in Eniro AB (publ) and has not been approved by any
supervisory authority. The Brochure only includes general
information and does not constitute a prospectus.
­Investors should not subscribe for or acquire any
­securities that are described in this Brochure based on
any information other than that stated in the Prospectus,
which was specifically prepared for the Rights Issue.
The Prospectus includes among other things a detailed
description of Eniro, the Rights Issue and the risks
involved when participating in the Rights Issue and
investing in Eniro. The Prospectus is available on Eniro’s
webpage, www.enirogroup.com, and on SEB’s website,
www.sebgroup.com/prospectuses. The Brochure is only
intended for shareholders of ordinary shares in Eniro.
Eniro has not taken and will not take any action to
permit an offer to the general public in any jurisdiction
other than Sweden. No subscription rights, paid subscribed shares or new shares (“Securities”) may be
offered, subscribed for, sold or transferred, directly or
­indirectly, in or to the USA except in accordance with
an exemption from the registration requirement in the
United States Securities Act of 1933 in the current ­wording
(“The Securities Act”) or any securities authority in any
state of the USA. This Brochure represents neither an offer
to transfer nor an invitation regarding an offer to acquire
any securities other than the securities. This ­Brochure is
not directed to people with domicile in the USA, Australia,
Singapore, New Zealand, Japan, Canada, Switzerland, Hong
Kong or South Africa, or in any other jurisdiction where
participation would require a further Prospectus, registration or other measures than those that follow from
Swedish law. Consequently this Brochure, the Prospectus,
marketing material or other material relating to the new
issue may not be distributed in or to any other jurisdiction
where distribution or the offer according to the prospectus
requires such actions or ­contravenes the rules of such
jurisdiction. People who receive copies of the Prospectus,
the Brochure or ­marketing materials must familiarise
themselves with and follow such restrictions. Actions in
contravention of the restrictions may represent a breach
of applicable securities legislation. Eniro reserves the right,
on its own judgement, to invalidate subscriptions that
Eniro or its agents consider may involve the infringement
or ­disregarding of laws, rules or regulations in any
­jurisdiction.
Definitions
The terms Eniro or the Company refer to Eniro AB (publ), a
Swedish, publicly listed, limited liability company, the Group
or a subsidiary of the Group, depending on context
The term Brochure refers to this brochure, which is a
­simplified description of Rights Issue and has not been
approved by any supervisory authority
The term Group refers to Eniro AB (publ), including subsidiaries
The term SEK refers to Swedish kronor and SEKm refers to
millions of SEK.
The term Prospectus refers to the prospectus prepared by
Eniro dated March 13, 2015, pertaining to the offer for the
subscription of ordinary shares in Eniro AB (publ), corporate
registration number 556588-0936, and which was registered
and approved by the Swedish Financial Supervisory Authority,
which is not to be confused with this Brochure
The term The Rights Issue refers to the invitation to
subscribe for new ordinary shares in accordance with the
Prospectus
Key dates
Subscription period
Trading with subscription
rights
Trading with paid subscribed
shares
Re-classification from paid
subscribed shares to ordinary
shares
The term Ordinary Shares refers to the shares which the
invitation to subscribe for relates to and are regulated by
Eniro’s Articles of Association
The term Euroclear refers to Euroclear Sweden AB
The term ABG refers to ABG Sundal Collier AB and
The term SEB refers to Skandinaviska Enskilda Banken AB
Other information
March 16 to March 30, 2015
March 16 to March 26, 2015
March 16 to April 24, 2015
Around April 30, 2015
Market
Short Name Ordinary share
Subscription right
Paid subscribed share
ISIN codes Ordinary share
Subscription right
Paid subscribed share
Nasdaq Stockholm
ENRO
ENRO TR
ENRO BTA
SE0000718017
SE0006881314
SE0006881322
Information to ordinary shareholders in Eniro AB (Publ)
3
Table of content
4 CEO comments
5 Eniro in short
6 Background and reasons
7 The issues in short and the amended loan agreement
8 How to participate in the Rights Issue
11 Selected financial information
15 Risk factors
16 Questions and answers
Information to ordinary shareholders in Eniro AB (Publ)
4
CEO comments
”The transactions and
the re-negotiated and amended
loan agreement increase the financial
flexibility of the Company, which
is an important prerequisite in
the work with realizing our
strategy on a growing digital
media market”
I took over the role as President & CEO with an ambition to focus on growing sales and build
motivation among our employees. This work has set the tone and became even more important
during the t­ urbulent autumn, when, among other things, the forecast was lowered for the second
time during 2014 due to overly optimistic assessments.
The changed forecast gave rise to discussions with our creditors on amending the terms of
the ­Company’s loans to the new conditions – a dialog that required extensive analyses and lengthy
­discussions in order to reach an agreement with a consortium of six banks. Parallel with this we
­conducted a review of our strategy, resulting in a clear strategic direction to work towards in 2015.
To capitalize on the opportunities that exist in the growing market for digital marketing and lower
the Company’s debt, the Board of Directors has proposed a fully guaranteed Rights Issue and convertible issue.
The financing package comes with a re-negotiated and extended loan agreement. The amended
agreement will initially be reduced by a one-time amortization of at least SEK 650 million and the
annual amortizations will be reduced by more than half.
Eniro’s transformation entails that we today have an attractive product offer. Now we take the next
step in the transformation. We aim to increase profitability by adding new related services to the product portfolio, continue with the streamlining of the organization and to fully exploit our unique database, strong sales force and well-known brands. This financing package will give us the vigour needed
to realize our plans . We will ensure stability within Eniro. We will also ensure that our activities will
develop in the best possible way in order to be competitive and create shareholder value.
Stefan Kercza
President & CEO
Information to ordinary shareholders in Eniro AB (Publ)
5
Eniro in short
Business description
Eniro is a leading local search company with activities in
­Scandinavia, Finland and Poland. The Company has more than
250,000 customers and approximately 1,300 sales represen­tatives.
Eniro has a unique database that is continuously refined and
updated with relevant content, which the approximately 8
­million unique visitors per week use through Eniro’s search
offering. Eniro has a brand awareness exceeding 90 per cent on
all Scandinavian markets and just below 80 per cent in Poland.1)
The Company was spun off from Telia in 2000, the share is
listed on Nasdaq Stockholm and the head quarter is located in
Solna outside Stockholm. Eniro’s operating revenues for 2014
amounted to SEK 3,002 million and the number of full-time
employees was 2,256.
Operational goals
Eniro’s strategy is steered by a set of operational goals for
­ensuring stability and profitability. Eniro’s user benefit is
­measured in terms of the number of unique visitors to the
search sites and their frequency of visits. The goal for 2015 is
to both increase the number of visitors to sites and how often
the same visitors return to the sites. By adapting the offering
to advertisers’ needs to a greater extent, their exposure will
improve. This will be reflected in the level of traffic documented
in the effect reports and can be measured in terms of
customer satisfaction. The goal for 2015 is to continue to
improve customer satisfaction.
Another goal is to increase employee satisfaction, which
is measured by monitoring staff turnover, among other things.
The goal for 2015 is continuously to reduce staff turnover.
Financial goals
The strategic actions outlined above will lead to improved
­profitability over time.
Dividend policy
Eniro prioritizes reducing the Company’s net debt over payment
of a dividend. Accordingly, the Board of Directors of Eniro
­proposes that no dividend be paid for the Company’s ordinary
shares for the 2014 fiscal year. The Board of Directors proposes
payment of a dividend of SEK 48 per share for 2014 to owners of
preference shares, which corresponds to a total dividend payout of
SEK 48 million. It is proposed that dividends be paid out in threemonth intervals. Please, see page 25 in the annual report 2014.
1) Source: LynxEye 2014 and Brand Tracking Study, Nepa Research (ages 15-75)
VISION, BUSINESS CONCEPT & VALUES
Vision
Eniro’s vision is to be the symbol for local search.
Eniro has an established position to work with as a foundation to continue d
­ eveloping
the best quality and technology for meeting users’ future needs for local search in
Scandinavia, Finland and Poland.
The symbol of local search
Business concept
Eniro’s business concept is the same as when the Company was started more than
130 years ago – to provide the best local information and thereby bring buyers
and sellers together.
Eniro aggregates and processes information from a vast range of information sources,
including information registers, websites, telecom operators and sales organizations.
This information is filtered, sorted and organized in the database, which is Eniro’s
most important asset. Revenues from Local Search are generated through exposure
and rankings by advertisers in Eniro’s search services.
Values
Eniro’s three values – devoted, perceptive, and reliable – are to permeate the entire
organization.
Devoted entails that Eniro always strive to offer customers and users the best
­possible solution.
Perceptive means that Eniro works according to the needs of the specific target
groups by actively listening and having an open dialog.
Reliable – Eniro will be perceived as being reliable by delivering what we have promised.
• Devoted
• Perceptive
• Reliable
Information to ordinary shareholders in Eniro AB (Publ)
6
Background and reasons
The media market has changed considerably in recent
years. The digital marketing segment has grown rapidly,
and is currently representing more than one third of the
advertising market in Scandinavia. Eniro has been early in
the digital transition. From being a catalogue company, the
Company today offers a complete digital product range where
digital segments represented 88 per cent of total advertising
revenues in 2014. The Company has approximately 8 million
unique visitors on Eniro’s sites every week and over 250,000
customers that have chosen to increase visibility in Eniro’s
different marketing channels.
During the fall of 2014, Eniro went through a leadership
change and the new management has determined a strategic
approach with three clear focus areas, as described on pages
36-37 in the Prospectus. The ambition is also to make Eniro’s
products even more attractive and create a more customerand market oriented sales organization. Eniro will work more
clearly with business development and focus on related
services that complement and add value to the current local
search offerings. Together with Eniro’s unique and extensive
local database, the 1,300 person strong sales force and
well-known brands, this provides potential to create
additional business opportunities in the growing digital media
market and increase profitability. In parallel with the work
to strengthen the position in Local Search, the Company is
handling the shrinking but continuously profitable Print and
Voice segments.
At the end of 2014, after a SEK 1.3 billion reduction of
debt during the last three years Eniro’s net debt amounted to
approximately SEK 2.2 billion. During the same period, Eniro
has put a strong focus on optimizing the cost structure and has
implemented cost savings exceeding SEK 900 million. Despite
these initiatives, the Company has a high net debt level in
relation to the Company’s current profitability. The Company
does not have sufficient working capital to cover the current
needs during the next 12 months as from the date of this
Prospectus. As part of the review of the Company’s capital
structure, Eniro has agreed on amendments to the loan
agreement with the bank syndicate, subject to completion of
the issuances. Among other things, the new agreement means
an extension of the maturity and a significantly lower amortization rate, which provides greater financial flexibility and
discretion.
Due to these circumstances, the Board of Directors of
Eniro has decided, subject to EGM approval, on a fully
guaranteed Rights Issue of ordinary shares of approximately
SEK 458 million and a placed directed convertible bond issue
in the principal amount of SEK 500 million . The EGM resolved
to approve the Board of Directors decision on 9 March 2015.
The aggregate issue proceeds is SEK 933 million before
issuance costs, whereof at least SEK 650 million will be
applied towards repayment the Company’s bank debt. The
purpose of the issuances is to amortize on the bank loans and
to create a greater financial flexibility to realize the Company’s
strategy. Thus, additional value will be created for the
Company’s shareholders and other stakeholders.
1) The subscription price is 95 per cent of the nominal amount of the convertibles which
entails that the Company will be provided SEK 475 million before issue costs.
Information to ordinary shareholders in Eniro AB (Publ)
7
The issues in short and
the ­amended loan ­agreement
The Rights Issue in short
Loan agreement with existing bank consortium
Preferential right: Each existing ordinary share in the
­Company is e­ ligible for three (3) subscription rights. One (1)
subscription right entitles the holder to subscribe for one (1)
new ordinary share.
Prior to the Rights Issue, the Company has reached an
­agreement with the existing bank syndicate on certain
­amendments in the loan agreement. The amendments in the
loan agreement will enter into effect only after the Rights
Issue of approximately SEK 458 million and the convertible
bond issue for a principal amount of SEK 500 million have
been completed and certain other conditions as stated in the
amended agreement are met. The amended agreement covers
a long term financing until the end of 2018.
The agreement covers three loan facilities, of which one
is a revolving credit facility. The first loan facility amounts to
SEK 1,100 million and is repaid on a semi-annual basis in the
total amount of SEK 150 million per year, beginning on June
30, 2015. The second facility amounts to SEK 600 million and
is repaid SEK 25 million per year in total on a semi-annual
basis, beginning on June 30, 2016. The revolving credit
­facility amounts to SEK 150 million.
The interest on the facilities is determined by a reference
rate plus a margin. For the first facility and the revolving credit
facility, the margin is at starting point 4.00 per cent. If the
ratio between total net debt to EBITDA is less than 1.5, the
margin is 3.50 per cent. For the second facility, the margin is
initially 5.00 per cent.
Subscription price: 1.50 SEK per share
Record date: March 12, 2015
Subscription period: March 16 – March 30, 2015
ISIN codes: Ordinary share: SE0000718017
Subscription right: SE0006881314
Paid subscribed shares: SE0006881322
Subscription and payment with preferential right: Subscription
with subscription rights is done through simultaneous cash
payment during the subscription period
Trading with subscription rights: March 16 – March 26, 2015
Trading with paid subscribed shares: March 16 – April 24, 2015
The convertible bond issue in short
In addition to the Rights Issue, Eniro’s Board of Directors decided
on February 5, 2015 on a convertible bond issue s­ ubject to EGM
approval. The Board of Directors’ decision was approved at the
EGM on March 9, 2015. Through the c­ onvertible bond issue,
the Company issues a convertible loan for a principal amount
of SEK 500 million through the issue of convertibles. The
­convertible bond issue has been directed to, and placed with,
a number of Swedish and international i­ nstitutional and
­qualified investors.
Amount: Principal amount of SEK 500 million
Term: 5 years
Coupon: Annual interest of 6 per cent paid semi-annually
Conversion price: SEK 1.95
Potential dilution: 39 per cent assuming full conversion
The subscriptions of the convertible issue are conditional on
the Rights Issue being carried out, the bank loan agreement not
being terminated for repayment and the amendment agreement
regarding the bank loan not being terminated
Information to ordinary shareholders in Eniro AB (Publ)
8
How to ­participate in the Rights Issue
Terms
Subscription price
Record date for participation in the Rights Issue
Subscription period
Trading in subscription rights
For each share in Eniro you will receive three (3) subscription rights. One (1) subscription
right entitles to subscription for one (1) new ordinary share
SEK 1.50 per ordinary share
March 12, 2015
March 16 – March 30, 2015
March 16 – March 26, 2015
Subscription for new ordinary shares with subscription rights
1. YOU WILL BE ALLOTTED SUBSCRIPTION RIGHTS
For every ordinary share in Eniro that you hold on March 12,
2015 you receive three (3) subscription rights
1 ordinary share
in Eniro
3 subscriptions rights
2. HOW TO USE THE SUBSCRIPTION RIGHTS
One (1) subscription right + SEK 1.50 gives one (1) new­
­ordinary share in Eniro
1 subscriptions rights
1 new ordinary share
+ SEK 1,50
3. ARE YOU A DIRECTLY REGISTERED SHAREHOLDER OR DO YOU HAVE THE SHARES WITH A NOMINEE?
If you are exercising all the subscription rights, use the pre-printed payment form from
Euroclear.
You have a securities account (i.e. are
directly registered) and are resident in
Sweden
You have a securities account
(i.e. are directly registered) and are not
resident in Sweden
You have a custody account
(i.e. you have a nominee)
If you have bought, sold or transferred any subscription rights to or from your securities
account, use the special subscription form that is distributed with the issue statement. The
subscription form can also be obtained from SEB, telephone +46 8-639 27 50. Payment is
made according to the instructions on the subscription form.
Contact SEB for information about subscription and payment and about the restrictions that
apply in certain jurisdictions.
If you have your shares in Eniro in one or more custody accounts with a bank or securities
institution, you can obtain information from your nominee(s) about the number of subscription rights you have received. Follow the instructions from your nominee(s)
Subscription for ordinary shares with subsidiary preferential right or without preferential right (by shareholders
2)
and others)
You are a directly registered shareholder
Use the special subscription form. The subscription form can be ordered from SEB,
telephone +46 8-639 27 50.
You have a depository
(i.e. you have a nominee)
Subscription and payment must be through the manager. Follow the instructions from
your nominee(s).3)
1) Note that certain rules apply to shareholders resident in the USA and certain other jurisdictions. See ”Shareholders registered in certain unauthorised jurisdictions” in the section ”
Terms, conditions and instructions” in the Prospectus.
2 Allotment will be in accordance with what is stated under ”allotment of new ordinary shares subscribed for with subsidiary preferential rights or without subscription rights” in the
­section ”Terms, conditions and instructions” in the Prospectus.
3) Note that some nominees may have shorter deadlines for applications. Check the instructions from your nominee(s).
Information to ordinary shareholders in Eniro AB (Publ)
9
Preferential- and Subscription right
The Rights Issue comprises a maximum of 305,642,220 new
ordinary shares. Those who on the record date, March 12,
2015, are registered as holders of ordinary shares in Eniro
have preferential rights to subscribe for new ordinary shares
in the Rights Issue. Those who on the record date are
registered as holders of ordinary shares in Eniro receive three
(3) subscription rights for every existing ordinary share in
Eniro. One (1) subscription right entitles to one (1) new
ordinary share.
Provided that all new ordinary shares are subscribed
for in the Rights Issue, the number of ordinary shares in the
Company will increase from 101,880,740 shares to
407,522,960 ordinary shares, corresponding to an increase
of 300 per cent. For existing holders of shares who do not
participate in the Rights Issue there will be a dilution effect
corresponding to approximately 75 per cent of the total
number of ordinary shares and votes in the Company after the
Rights Issue. Holders of ordinary shares who choose not to
participate in the Offering may be compensated financially
for the dilution effect by selling their subscription rights.
Subscription price
The new ordinary shares in Eniro are issued at a subscription
price of SEK 1.50 per new ordinary share. No commission is
charged.
Record date
The record date at Euroclear for determining who is entitled
to receive subscription rights in the Rights Issue is March 12,
2015. Ordinary shares in Eniro were traded exclusive of the
right to participate in the Rights Issue from and including
March 11, 2015. The last day of trading in ordinary shares in
Eniro including the right to participate in the Rights Issue was
March 10, 2015.
Subscription period
Subscription for new ordinary shares takes place during the
period from and including 16 March 2015 up to including
30 March 2015. Eniro’s Board of Directors is entitled to extend
the subscription period which – when applicable – will be
announced through a press release as soon as possible after
such a decision has been made. A subscription for new
ordinary shares on the basis of subscription rights is
irrevocable and shareholders cannot cancel or modify such
a subscription for new ordinary shares.
The issue statement sets forth the number of
A pre-printed issue statement with an attached payment form
has been sent together with this Brochure to directly registered
holders of ordinary shares and representatives of holders of
ordinary share who on the record date are registered in the
share register kept by Euroclear on Eniro’s behalf. The issue
statement sets forth the number of subscription rights received
and the total number of new ordinary shares that can be
subscribed for by virtue of the subscription rights. No securities
notification will be sent out regarding the registration of
subscription rights on securities accounts.
Those who in connection with the share register are
included in the specific list of pledge holders and trustees will
not receive the issue statement but are informed separately.
Shareholders whose holding is nominee-registered with
a bank or other nominee do not receive the issue statement or
Brochure. Subscription and payment for new ordinary shares
that are subscribed for with subscription rights (subscription
with preferential right) should instead be made through the
respective nominee and in accordance with instructions from
the nominee in question or, if the holding is registered with
more than one nominee, through each of these.
Trading in subscription rights
Trading in subscription rights takes place on Nasdaq
Stockholm during the period from and including March 16,
2015 up to and including March 26, 2015 under the symbol
”ENRO TR”. SEB and other securities institutions with the
required licenses are available for brokerage services in
connection with the buying and selling of subscription rights.
When subscription rights are sold, both the primary and the
subsidiary preferential rights are transferred to the acquirer
of the subscription rights. The ISIN code for subscription
rights is SE0006881314.
Subscribing for new ordinary shares with
subscription rights
Subscription of new ordinary shares with subscription rights
will take place during the period from and including March 16,
2015 up to and including March 30, 2015. Upon expiry of the
subscription period, unexercised subscription rights will become
invalid and will therefore have no value. After March 30, 2015,
unexercised subscription rights will be removed from the holder’s
securities account, without notice from Euroclear.
In order for the value of subscription rights not to be lost,
the holder must either:
• Exercise the subscription rights to subscribe for new
ordinary shares no later than March 30, 2015, or in
accordance with instructions from the subscriber’s nominee,
or
• Sell the subscription rights that are not to be exercised
no later than March 26, 2015.
Subscription supported by subscription rights is effected
by means of simultaneous cash payment, either using the
pre-printed payment form provided or by the use of a special
subscription form in accordance with one of the following
alternatives:
• The payment form shall be used if all subscription rights
Information to ordinary shareholders in Eniro AB (Publ)
10
according to the issue statement from Euroclear are to be
exercised. No additions or changes may be made to the
payment form.
• The subscription form named “Subscription for shares with
subscription rights” shall be used if the subscription rights
have been bought, sold or transferred from another
securities account, or if for any other reason the number
of subscription rights differs from what is stated on the
pre-printed issue statement. When the duly filled in
subscription form is submitted, payment shall be made for
the new ordinary shares being subscribed for; this may be
done in accordance with other payments using bank giro,
for example by way of internet bank, giro transfer or through
a bank branch office.
Subscription forms in accordance with above may be ordered
from SEB during office hours on telephone: +46 8 639 27 50.
Subscription forms must be received by SEB no later than
March 30, 2015.
Directly registered shareholders who are not resident in
Sweden and are entitled to subscribe for new ordinary shares
with subscription rights and who are not subject to the
restrictions described under the heading “Shareholders
registered in certain unauthorised jurisdictions” in the
Prospectus, but who are unable to use the pre-printed
payment form, may pay in SEK through a foreign bank in
accordance with the instructions below:
Address: SEB
Emissioner RB6
106 40 Stockholm
IBAN number: SE58 5000 0000 0586 5100 3633
Account number: 5865 10 036 33
BIC: ESSESESS
The subscriber’s name, address, securities account number
and payment identity stated on the issue statement must be
quoted. The last date for payment is March 30, 2015. Payment
shall be made in accordance with the above instructions,
however, the payment identity from the subscription form
shall be stated. The subscription form must be received by
SEB at the address above no later than March 30, 2015.
Nominee-registered holders of ordinary shares who
wish to subscribe for new ordinary shares supported by
subscription rights must apply for subscription in accordance
with the instructions from their nominee.
Paid subscribed shares
After payment and subscription, Euroclear will distribute a
securities notification to confirm that paid subscribed shares
have been registered on the securities account. The newly
subscribed ordinary shares are entered as paid subscribed
shared on the securities account until the new ordinary shares
have been registered with the Swedish Companies
Registration Office. It is expected that new ordinary shares
subscribed for with subscription rights will be registered with
the Swedish Companies Registration Office on or about April
20, 2015. The paid subscribed shared will then be
re-registered as ordinary shares. No securities notification will
be issued in connection with this re-classification, which is
expected to occur on or about April 30, 2015.
Trading in paid subscribed shared is expected to take
place on Nasdaq Stockholm during the period from and
including March 16, 2015 up to and including April 24, 2015
under the symbol ”ENRO BTA”. SEB and other securities
institutions with the required licenses will provide brokerage
services in connection with the buying and selling of paid
subscribed shares. The ISIN code for the paid subscribed
shares is SE0006881322.
Right to dividend
The new ordinary shares entitle the holder to dividend for
the first time on the first record date for dividend that occurs
immediately following the registration of new ordinary shares
with the Swedish Companies Registration Office.
Announcement of the outcome of the Rights Issue
The preliminary subscription results from the Rights Issue
are expected to be announced on or about April 2, 2015
through a press release from Eniro. The final subscription
results are expected to be announced on or about April 10,
2015 through a press release from Eniro.
Subscription undertakings and guarantee
commitments
The Company’s shareholders Nortal Capital AB (a company
controlled by Staffan Persson, a member of the Board of
Directors), Danske Capital AB, M2 Capital Management AB
and Lars-Johan Jarnheimer who jointly represent around 18
per cent of the shares and votes, have pledged to Eniro and
ABG to subscribe and pay for their respective pro rata shares
(proportionally compared to their shareholding) in the Rights
Issue. The subscription undertakings were entered into on
February 5, 2015. Nortal Capital AB and Danske Capital AB
will be paid the same commission as the other guarantors. The
question regarding compensation has, upon the Company’s
request, been examined by the Swedish Securities Council in
the statement AMN 2015:02 and the Board of Directors has
carefully considered the council’s statement prior to deciding
to approve the compensations.
The Company has received guarantee commitments from
Bure Equity AB, Catella Fondförvaltning AB, Tedde Jeansson,
SSE Capital, MGA Holding AB, Carl Rosvall, Schött & Tour
Capital AB, Kristian Kierkegaard Holding AB, LMK Ventures
AB, Myacom Investment AB, Göran Källebo and Shaps Capital
AB (“the Guarantors”), under which the Guarantors have
pledged, on certain conditions and if all new ordinary shares
in the Rights Issue have not been subscribed for or subscribed
for but not paid in due time, to subscribe and pay for new
ordinary shares up to an aggregated amount corresponding
to approximately 82 per cent of the total issue amount. The
guarantee commitments were entered into between February
4 and February 6, 2015. As compensation for their
commitments, the Guarantors will receive a commission
corresponding to 5 per cent of the guaranteed amount. In
total, the compensation to the Guarantors, Nortal Capital AB
and Danske Capital AB amounts to approximately SEK 23
million.
Information to ordinary shareholders in Eniro AB (Publ)
11
Selected financial information
The overview regarding the financial years 2012, 2013 and
2014 is derived from Eniro’s annual reports. The consolidated
financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) and IFRIC
interpretations as endorsed by the EU, as well as with
applicable stipulations in the Swedish Annual Accounts Act
and Swedish Financial Reporting Board Recommendation
RFR 1 – Supplementary Accounting Policies for Groups.
The annual reports and consolidated financial statements
for 2012, 2013 and 2014 have been audited by the Company’s
auditors. In August 2014, the Board of Directors commissioned an investigation to validate the Group’s accounts as
of the fourth quarter of 2013. The investigation showed
primarily accrual inaccuracies, entailing that revenues have
been recognized earlier than they should have. The accrual
inaccuracies pertained to Desktop Search and Mobile Search
revenue categories within the Local Search operating
segment and stem from discounts offered to customers. These
discounts were incorrectly allocated only to revenue accrued
over time (subscription fees). The discounts were not
allocated to the portion of revenue recognized immediately
(the services provided at the time of sale). As a result the
amount recognized at the point of sale was too high.
The incorrect accounting of discounts affected the
financial statements for the fourth quarter of 2013 through
the second quarter of 2014. Consequently, the 2013 figures
have been recalculated and do not agree with what was stated
in the 2013 annual report. In terms of the figures for 2013,
reference is made to the figures as presented in the 2014
annual report.
The accounts for 2012 were not affected by the aforementioned accrual inaccuracies but have been recalculated due to
changes in accounting principles with regards to pensions. All
reports are available on Eniro’s webpage www.enirogroup.com.
Condensed income statement
SEKm
2014
2013
2012
3,002
-720
-1,055
-273
-443
-206
57
-1,803
-1,441
3,588
-875
-1,140
-262
-503
-259
17
-104
462
3,999
-959
-1,288
-570
-431
-327
69
-12
481
Net financial items
-153
-142
-140
Income before tax
-1,594
320
341
-68
-141
-100
-1,662
179
241
2014
2013
2012
5,108
404
606
58
6,176
6,948
397
716
113
8,174
7,330
533
883
198
8,944
1,737
60
1,767
853
625
1,134
6,176
3,598
68
2,115
560
452
1,381
8,174
3,543
2,527
804
439
1,631
8,944
Operating revenue
Production costs
Sales costs
Marketing costs
Administration costs
Product development costs
Other revenue/costs
Impairment of assets
Operating income
Income tax
Net income for the period
Condensed balance sheet
SEKm
ASSETS
Intangible assets
Other non-current assets
Other current receivables
Cash and cash equivalents
Total assets
Shareholders’ equity and liabilities
Shareholders’ equity (owners of the parent company)
Non-controlling interests
Long-term borrowing
Non-current non-interest-bearing liabilities
Short-term borrowing
Current non-interest-bearing liabilities
Total shareholders’ equity and liabilities
Information to ordinary shareholders in Eniro AB (Publ)
12
Condensed cash flow statement
SEKm
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Cash flow for the period
Cash and cash equivalents at start of the period
Exchange rate differences in cash and cash equivalents
Cash and cash equivalents at end of the period
2014
2013
2012
288
-75
-271
-58
481
-119
-440
-78
420
-51
-730
-361
113
3
58
198
-7
113
557
2
198
2014
2013
2012
631
675
21%
-48%
3,021
-55%
2,208
1.23
29%
3.3x
777
884
22%
13%
3,607
5%
2,340
0.64
45%
2.6x
976
976
24%
12%
3,308
7%
2,704
0.76
40%
2.8x
Key ratios
EBITDA, SEKm
Adjusted EBITDA, SEKm
Operating margin – EBITDA
Operating margin – EBIT
Average shareholders’ equity, SEKm
Return on shareholders’ equity
Interest-bearing net debt, SEKm
Debt/equity ratio
Equity/assets ratio
Interest-bearing net debt/adjusted EBITDA
Definitions of key ratios
EBITDA
Operating income before depreciation,
amortization and impairment losses.
ADJUSTED EBITDA
EBITDA excluding restructuring costs
and other items affecting comparability.
OPERATING MARGIN - EBITDA
EBITDA divided by operating revenue.
OPERATING MARGIN - EBIT
EBIT divided by operating revenue.
AVERAGE SHAREHOLDERS’ EQUITY,
SEK million
Calculated as average shareholders’
equity attributable to owners of the
Parent company per quarter, based on
the opening and closing balance for each
quarter.
RETURN ON SHAREHOLDERS’ EQUITY
Net income for the period divided by
average shareholders’ equity attributable to owners of the Parent company,.
INTEREST-BEARING NET DEBT
Borrowings excluding interest rate derivatives less cash and cash equivalents
and interest-bearing assets.
DEBT/EQUITY RATIO
Interest-bearing net debt divided by
­shareholders’ equity, including holdings
with a controlling influence.
EQUITY/ASSETS RATIO
Shareholders’ equity including non-­
controlling interests divided by total
assets.
INTEREST-BEARING NET DEBT/­
ADJUSTED EBITDA
Interest-bearing net debt divided by
adjusted EBITDA.
Information to ordinary shareholders in Eniro AB (Publ)
13
Financing
Eniro’s operations are mainly financed by equity and interestbearing liabilities. On December 31, 2014, Shareholders’
equity amounted to SEK 1,797 million, of which the share
capital amounted to SEK 309 million, additional paid in
capital amounted to SEK 5,125 million, reserves to SEK -277
million and retained earnings to SEK -3,420 million.
On 31 December 2014, total borrowings amounted to
SEK 2,392 million (SEK 1,767 million in long-term
borrowings and SEK 625 million in short-term borrowings).
The Company’s net debt amounted to SEK 2,208 million.
Loan agreement
On November 30, 2010, Eniro entered into a loan agreement
with, among others, Danske Bank A/S, Denmark, Sweden
Branch, DNB Bank ASA, Sweden Branch, Handelsbanken
Capital Markets, Svenska Handelsbanken AB (publ),
Merchant Banking, Skandinaviska Enskilda Banken AB
(publ), Nordea Bank AB (publ) and Swedbank AB (publ).
The loan agreement has since been amended on a number
of occasions. Prior to the Rights Issue, the Company has
agreed with the lenders on certain amendments in the loan
agreement. The amendments in the loan agreement will enter
into effect only after the Rights Issue and the convertible bond
issue of a principal amount of SEK 500 million have been
carried out and certain other conditions as stated in the
amended agreement are met.
The loan agreement contains conditions regarding
compulsory repayment in advance regarding revenue from
divestments, insurance cases and capital market transactions.
In the amended agreement, it has been specifically agreed that
the higher of (i) the total proceeds from the Rights Issue and
the convertible bond issue less reasonable transaction costs
and SEK 200 million and (ii) SEK 650 million, shall be used
for repayment of the loan. In addition it has been agreed that
proceeds from potential future capital market transactions
that shall be used to repay the Company’s preference shares
shall be excluded from mandatory repayment when the
amended loan agreement enters into force.
If the amended loan agreement enters into effect, the
margin for Tranche A1-3 and the revolving credit facility is
initially 4.00 per cent. If the ratio between the total net debt
and EBITDA drops below 1.5, the margin is decreased to 3.50
per cent. For Tranche B, the margin is initially 5.00 per cent.
The margin will after one year be increased gradually on three
occasions to amount to 7.50 per cent after 1.5 years.
Shares in Group companies that are directly owned by
Eniro, all relevant Group companies (i.e. each Group company
with an EBITDA corresponding to 5 per cent or more of
EBITDA at a Group level, have gross assets or a turnover
corresponding to 5 per cent or more of the Group’s gross assets
or turnover) and all Group companies that own or hold rights
to search engines, databases or other assets that are significant
to the Group’s operations have been pledged as collateral for
obligations under the loan agreement and associated
financing documentation. Eniro and the relevant Group
companies also guarantee the other Group companies’
obligations under the loan agreement and associated
financing documentation. See also in Prospectus and in note
15 in the 2014 annual report.
Working capital
The Company does not have sufficient working capital to cover
the current needs during the next 12 months from the time of
the publication of the Prospectus.
ACTION PLAN AND CONSEQUENCES
The Extraordinary General Meeting on March 9, 2015
resolved to approve the underwritten Rights Issue of ordinary
shares amounting to approximately SEK 458 million in
accordance with the terms described in the Prospectus as well
as to approve a placed and directed convertible issue of a
nominal SEK 500 million. These issues are expected to raise a
maximum of SEK 200 million in working capital for the
Company after issue costs and agreed repayments on the bank
loans. The Company assesses that the working capital injected
through the issues and the amendments to the loan agreement
together meet the Company’s working capital needs for the
upcoming 12-month period.
It should be noted that no collateral has been pledged for
the subscription and guarantee undertakings which have been
provided regarding the Rights Issue. Nor has collateral been
pledged by the subscribers of the convertibles. In addition, the
subscription and guarantee undertakings regarding the Rights
Issue are conditional on the loan under the bank loan
agreement not being terminated for repayment and the
amendment agreement regarding the bank loan not being
terminated. The subscriptions of the convertible issue are
conditional on the Rights Issue being carried out, the bank
loan agreement not being terminated for repayment and the
amendment agreement regarding the bank loan not being
terminated.
The banks have the right to demand immediate
repayment of the loan agreement if, inter alia, a material
adverse effect occurs regarding the Company. In addition, the
amended loan agreement does not enter into effect if a
material adverse effect regarding the Company occurs or if the
Rights Issue or convertible issue are not fully carried out.
If the amended loan agreement does not enter into effect,
the Company is at risk of lacking necessary working capital to
meet the required repayments that apply according to the
existing loan agreement. In such a situation, the Company will
need to reach a new agreement with the Company’s lenders. If
such renegotiation were not to succeed or if Eniro does not
succeed in obtaining new financing in another manner, Eniro will
be in breach of the existing loan agreement. Such breach would
in such case arise on June 30, 2015, when Eniro shall make an
agreed amortisation and would entitle the lending banks to
demand immediate repayment of the outstanding bank loan.
The outstanding loan amounted to SEK 2,392 million as
per December 31, 2014 (at which date the Company’s cash
Information to ordinary shareholders in Eniro AB (Publ)
14
and cash equivalents amounted to SEK 58million), and
since Eniro lacks the possibility to make a repayment of that
magnitude, Eniro would be forced to apply for bankruptcy if
immediate repayment was demanded.
amounted to SEK 58m. In addition, Eniro had unutilized
credit facilities of SEK 53m on the same date. Cash and cash
equivalents and unutilized credit facilities totalled SEK 111m
at December 31, 2014.
Financial resources and cash flow
Ownership structure
Over the years, Eniro has primarily funded liquidity- and
capital requirements for operational activities through cash
flow from operations and, to a lesser extent, through
borrowings. Even after receiving the net proceeds from the
Rights Issue and the convertible bond issue, the financing of
liquidity and capital requirements will still primarily consist of
cash flow from operations and external borrowing. As of
December 31, 2014, Eniro’s cash and cash equivalents
On Februrary 28, 2015, the ten largest shareholders’ holdings
amounted to 41.0. per cent of the votes in the Company,
corresponding to 40.9 per cent of the share capital, according
to the share register kept by Euroclear. At the same date,
Eniro’s holdings of treasury shares amounted to 1,703,266.
The table below provides an overview of Eniro’s largest
shareholders as of 28 February 2015 including changes
known to the Company thereafter.
Shareholders
Ordinary shares
Preference shares
Share capital (%)
Votes (%)
Danske Capital Sverige AB
Zimbrine Holding BV (Staffan Persson)
Odey Capital
Deutsche Bank AG
Morgan Stanley kundkonto
Försäkringsaktiebolaget Avanza Pension
Skandinaviska Enskilda Banken S.A.
Länsförsäkringar fondförvaltning AB
Banque Öhman S. A.
Eniro AB
10,195,518
7,800,000
5,618,000
3,488,892
3,208,958
3,088,100
2,257,308
2,226,000
2,221,322
1,703,266
80,735
90,000
93,265
5,498
-
10.0 %
7.6 %
5.6 %
3.4 %
3.1 %
3.1 %
2.2 %
2.2 %
2.2 %
1.7 %
10.0 %
7.7 %
5.5 %
3.4 %
3.2 %
3.0 %
2.2 %
2.2 %
2.2 %
1.7 %
Total, 10 largest shareholders
41,807,364
269,498
40.9 %
41.0 %
Information to ordinary shareholders in Eniro AB (Publ)
15
Risk factors
The summary of certain risk factors provided below is only a limited and brief list of certain risk factors and does
not comprise a statement of all the risk factors that could be of importance for Eniro’s shares, operations as well
as the Rights Issue. The Prospectus covers a more detailed number of risk factors, which a potential investor
should carefully consider together with the other information in the Prospectus before a decision is made about
subscribing for ordinary shares in Eniro. Eniro’s shares, operations as well as the Rights Issue are affected, inter
alia, by the following risk factors:
Risks related to Eniro or the industry
• The Company’s loan agreement includes conditions that
might limit Eniro’s financial and operational flexibility and
thereby Eniro’s possibility of operating its activities. The loan
agreement also contains financial undertakings (covenants).
In the event that Eniro did not fulfil the defined loan
conditions under the loan agreement, this might result in a
breach of agreement that, if not relieved or the lender’s rights
thereby are not subject to a waiver by the lender, might result
in all outstanding loans immediately falling due for payment
and mortgaged assets having to be subject to realisation.
• The changed loan agreement is conditional, among other
things, on the completion of the Rights Issue and convertible
issue and if this condition is not fulfilled and the changes
do not come into force, Eniro risks not being able to meet its
undertakings with respect to the existing loan agreement,
which, according to the existing loan agreement, could result
in all outstanding loans immediately falling due for payment
and mortgaged assets having to be subject to realisation.
• The convertible issue is not secured and if subscribers do not
pay for the convertibles in the convertible issue and the
changed loan agreement thereby does not come into force,
which would mean that Eniro would probably not be able
to meet its undertakings with respect to the existing loan
agreement, which could result in all outstanding loans
immediately falling due for payment and mortgaged assets
having to be subject to realisation.
• When the Company’s liabilities mature, Eniro may need to
refinance its existing liabilities on less advantageous terms
for the Company than presently and there is a risk that new
capital cannot be acquired when the need arises.
• Increasing competition on the Scandinavian, Finnish and
Polish markets might lead to a reduction in the number of
customers and users, reduced sales income and increased
costs for Eniro.
• There is a risk that Eniro is unable to change or adapt its
existing, or develop new products and services to perform
correct and adequate investments which may lead to lost
customers and users, or that Eniro is forced to change
the pricing of its products and offer terms which are less
favourable for the Company in order to keep or attract
customers or users.
• Eniro’s business operations are dependent on that IT-based
support systems including data security systems work
effectively and without disruption. Eniro is also dependent
on specific individual consultants with certain specific
and materail knowledge of Eniro’s IT and communication
systems. If any of these consultants cease to provide Eniro
with their services such consultant could be difficult to
replace, which could lead to interruptions in Eniro’s IT
and communication systems. Each interruption, damage,
breach, or disturbance regarding Eniro’s IT and communication systems could have a material adverse effect on the
Company’s activities, results and financial position.
• Eniro is dependent on the Company being associated with
positive values. Any deterioration in reputation might lead
to a reduced number of customers and users, increased staff
turnover and difficulty in attracting new personnel.
• Disruptions, defects or inefficiency in the Company’s
internal control may lead to that the Company’s operations
are not conducted in accordance with applicable laws and
regulations, that the Company’s reporting systems do not
operate or that the operations cannot be adequately
controlled, which may have a material adverse effect on
the Company’s activities, results and financial position.
• Eniro’s authorisation to publish for www.eniro.se and
www.proff.se could be withdrawn by the Swedish
Broadcasting Authority. Should such authorisation be
withdrawn, the Swedish Data Protection Authority would
have the right to take measures against certain services
offered on www.eniro.se and www. Proff.se. If the authorisation to publish relating to the latter website is withdrawn,
it could result in Proff requiring a permit from the Swedish
Data Protection Authority in order to publish financial and
credit information without doing so unlawfully.
• According to IFRS, the need for impairment of Eniro’s
goodwill and other intangible assets with indefinite useful
life must be tested annually. If global economic conditions
continue to worsen and affect Eniro’s activities more than is
presently envisaged, or if Eniro’s business deteriorates more
quickly than the Company presently judges likely, there may
be a need for further impairment.
• Eniro may be subject to serious infringement of the
Company’s intellectual property rights and Eniro’s
possibility of protecting its intellectual property rights in the
future may deteriorate. It may also be the case that Eniro’s
databases are not considered to have intellectual property
right protection.
• New laws, directives or regulations, or amendments to
Information to ordinary shareholders in Eniro AB (Publ)
16
or new interpretations of existing ones, which affect the
Company’s activities, may lead to increased costs or other
disadvantageous consequences for the Company.
Risks related to securities in Eniro
• Prices of the new ordinary shares, paid subscription shares
and subscription rights may develop in an unfortunate
direction.
• If a shareholder does not sell his or her subscription
rights by 26 March 2015 or does not utilise his or her
subscription rights by paying by 30 March 2015, the
shareholder’s subscription rights will be lost without
value or ­compensation. If a shareholder does not utilise
his or her subscription rights, his or her proportionate
holding and voting rights in the Company will also be
correspondingly reduced.
• There is a risk that active trading in the subscription rights
will not develop or that trading will be insufficiently liquid
during the period. The price of the subscription rights will
depend on many different factors, including the
development of the Company’s share price, but may be
subject to significantly more volatility than the shares.
• Neither subscription nor guarantee undertakings are
secured. If shareholders or guarantors should for any reason
not meet their undertakings to subscribe for new shares in
the Rights Issue in accordance with their undertaking or
because certain conditions are not fulfilled, such
undertakings may not be fulfilled. This could have a
­considerable negative effect on the Company’s possibility
of successfully completing the Rights Issue.
• Neither subscription nor guarantee undertakings are
secured. The agreement contain conditions for fulfillent
and provisions on expiration. If shareholders or guarantors
should for any reason not meet their undertakings to
subscribe for new shares in the Rights Issue or if the
undertakings due to certain conditions are not fulfilled
or due to any other reason would default, it could have a
considerable negative effect on the Company’s possibility
of successfully completing the Rights Issue.
Questions and answers
What is a Rights Issue?
What is paid subscribed shares?
A Rights Issue is made by a company to raise more capital by
issuing new shares. The new shares can be issued to both existing and/or new shareholders. In Eniro’s Rights Issue, Eniro’s
existing ordinary shareholders have preferential rights to subscribe for new ordinary shares in Eniro in relation to the number of ordinary shares they already own.
During the time from subscription to formal registration with
the Swedish Companies Registration Office, the subscribed
share is called paid subscribed share or BTA (Sw: Betald
­Tecknad Aktie).
Do I as a shareholder receive any subscription rights?
Those who on the record date are registered as ordinary shareholders in Eniro will receive three (3) subscription rights for
each ordinary share. One (1) subscription right entitles the
holder to subscribe for one (1) new ordinary share.
What type of shares is issued in the Offering?
The Rights Issue comprises subscription for ordinary shares.
When can I subscribe for new ordinary shares in the
Rights Issue?
The subscription period for new ordinary shares range from
and including 16 March 2015 up to and including 30 March
2015. Eniro’s Board of Directors has the right to extend the
subscription period, which - if applicable - will be announced
through a press release as soon as possible after such decision
has been taken.
What is the subscription price?
The new ordinary shares in Eniro are issued at a subscription
price of SEK 1.50 per new ordinary share.
May I change my mind?
You cannot change your mind. The subscription is binding.
Do I as a shareholder need to do anything to receive
paid subscribed shares or new ordinary shares?
You as shareholders do not need to do anything more than to
submit the pre-printed issue statement or the special subscription form where you specify the number of subscription rights
to use. Following payment and subscription, Euroclear will
send out a notice confirming that paid subscribed shares have
been registered on your securities account. The newly issued
ordinary shares will be recorded as paid subscribed shares on
the securities account until the new shares have been registered with the Swedish Companies Registration Office. This
registration is expected to occur on or about 20 April 2015.
Thereafter, the paid subscribed shares will re-registered as
ordinary shares. No securities notification will be issued in
connection with this re-classification expected to occur on or
about April 30, 2015.
Where can I find further information and application
forms?
For further information and full terms and conditions please
refer to the Prospectus which is available on www.enirogroup.
com and www.sebgroup.com/prospectuses. Subscription
forms for subscription of new ordinary shares with subscription
rights (to be used if the subscription rights have been bought,
sold or transferred from another securities account, or if for
any other reason the number of subscription rights d
­ iffers from
what is stated on the pre-printed issue statement) may be ordered from SEB during office hours on telephone: +46 8 639 27 50.
Subscription forms for subscribing for ­ordinary shares
without subscription rights can be downloaded from
www.enirogroup.com and www.sebgroup.com/prospectuses.