• Cognor Holding S.A. (Cognor) plans to carry out a secondary public offering (Offering) in the coming weeks
• Cognor intends to issue between 25.4 million and 67.3 million series 11 shares without pre-emptive rights and with nominal value of PLN 1.5 each
• Cognor’s objective is to raise PLN 101 million in connection with its debt restructuring plans
• Savings from the debt restructuring are estimated at no less than PLN 25 million starting from 2018 and will help in distributing approx. 25% of the group’s consolidated net profit as dividend in the future

Cognor today announced its intention to conduct a secondary public offering of up to 67.3 million series 11 shares without pre-emptive rights. Proceeds from the share issue under the Offering and from bank financing will be used to buy back secured high-yield bonds issued in foreign markets, with a par value of approx. EUR 80.9 million. Cognor plans to raise PLN 101 million from the Offering. This capital raising is essential to tap into the EUR 50 million bank financing extended to Cognor on 30 June 2017. Interest on funds under the bank financing is based on WIBOR or EURIBOR plus margin on market terms for this type of transaction. For comparison, the current interest on the high-yield bonds that are to be bought back is 12.5% annualised.

The Offering is directed at both institutions and private persons but does not include a separate tranche for retail investors. Investors holding shares representing at least 0.3% of share capital at the prospectus publication date will have a priority right pursuant to the provisions of the share issue resolution. According to existing assumptions, the Offering will be conducted by the end of October 2017, although the final decision with regard to the date will be dependent on market conditions, among other things.

The issue price for the shares being offered in the Offering will be established in the course of book-building and will not be lower than the nominal value of Cognor’s shares, which following the Offering will be PLN 1.5.

Conducting the Offering as well as admitting and introducing the new shares to trade on the Warsaw Stock Exchange’s regulated market will be subject to mandatory legally-required approvals being obtained, including decisions by the Polish Financial Supervision Authority, National Depository for Securities and Warsaw Stock Exchange. All information pertaining to the offering will be made available in the prospectus, which is currently awaiting approval from the Polish Financial Supervision Authority.

The issue of Cognor’s shares also includes up to 16 million in-kind contribution shares (series 12) through a private subscription, which will be addressed to PS Holdco – Cognor’s principal shareholder – in exchange for a non-cash contribution in the form of 100% of shares in Odlewnia Metali Szopienice.  The in-kind contribution will be acquired for PLN 24 million, which means a more than 20% discount to the fair value of the in-kind contribution, established in accordance with an independent statutory auditor’s opinion. The issue price for the in-kind contribution shares will be equal to the issue price for the series 11 shares.

If all of the shares in the Offering are acquired by investors, after the Offering they will constitute 42.2% of the company’s share capital and entitle to 42.2% of the total number of votes at the general meeting (taking into account and assuming the maximum number of shares in the issue).

“We are finishing the formal process of preparing for the offering. We expect the Polish Financial Supervision Authority to soon approve our prospectus, following which we will be able to begin meeting with investors. We are certain that the benefits from converting the very expensive bond debt into shares and bank loans on market terms will convince investors to take part in the issue,” said Krzysztof Zoła, Cognor Holding’s management board member and CFO.

“Financial results show that operationally Cognor is doing really well and is generating earnings even despite such a large debt burden. We estimate that the new financing structure will reduce our finance costs by at least PLN 25 million per year, starting already in 2018. This will make it possible for us to even more quickly build value for shareholders and pay out dividends amounting to 25% of the group’s consolidated net profit,” added Krzysztof Zoła.

mBank S.A. and Pekao Investment Banking S.A. are joint global coordinators, joint bookrunners and joint offering agents. Trigon Dom Maklerski S.A. is also a joint bookrunner. Weil, Gotshal & Manges is providing legal advice for Cognor Holding’s SPO. MakMedia Group is providing communications support.

About Cognor Holding S.A.

Cognor Holding S.A. has been listed on the Warsaw Stock Exchange since 1997 and has been part of an industrial group active in the manufacture of steelworks products and trade in metal scrap since 2006. Cognor Holding S.A. is currently a holding company for a group that consists of over a dozen entities, operating mostly in Poland.

Disclaimer

This press release (and the information contained herein) is not an offer of any securities for sale, or the solicitation of an offer to purchase any securities, in the United States. Securities may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933, as amended (the “Securities Act“), or an exemption from registration. The securities referred to herein have not been and will not be registered under the Securities Act. No public offering of the securities will be made in the United States.

This press release is for promotional purposes only and constitutes an advertisement and not a prospectus for the purposes of applicable measures implementing EU Directive 2003/71/EC (as amended) (such Directive, together with any applicable implementing measures in the relevant home Member State under such Directive and other applicable regulations, the “Prospectus Directive”), and as such does not constitute an offer to sell, or the solicitation of an offer to purchase, securities. A prospectus prepared pursuant to the Prospectus Directive will be published, which when approved by the Polish Financial Supervision Authority – the Polish capital markets authority, will be the sole legally binding document containing information on Cognor Holding S.A.. (the “Company”) and the offering of the Company’s securities in Poland as well as on their admission and introduction to trading on a regulated market organized by the Warsaw Stock Exchange and which, when published, will be obtained from the website of the Company (www.cognorholding.eu).

The Offering and the distribution of this press release and other information in connection with the Offering in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

It may be unlawful to distribute this press release in certain jurisdictions. This press release is not for distribution in the United States, Australia, Canada, Japan or South Africa. The information in this press release does not constitute an offer of securities for sale in the United States, Australia, Canada, Japan or South Africa.

With respect to the United Kingdom, this communication is directed only at investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order“), and high net worth entities to whom it may otherwise lawfully be communicated in accordance with Article 49(2) of the Order (all such persons together being referred to as “relevant persons”). Any investment activity to which this communication relates will only be available to or will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this communication or any of its contents. The Offering will not be made to the public in the United Kingdom.

With respect to member states of the European Union other than the United Kingdom, this communication is directed only at, and the securities referred to herein shall be offered only to, qualified investors within the meaning of Article 2(1)(e) of Prospectus Directive (“Qualified Investors”) and/or in other circumstances falling within Article 3(2) of the Prospectus Directive. Any such qualified investor will also be deemed to have represented and agreed that any such securities acquired by it in the Offering have not been acquired on behalf of persons other than such Qualified Investors.

This press release does not constitute a recommendation within the meaning of the Regulation of the Polish Minister of Finance Regarding Information Constituting Recommendations Concerning Financial Instruments or Issuers Thereof dated October 19, 2005.

Making investments to which this press release elates may expose an investor to a significant risk of losing all of the amount invested. Persons considering investment should consult an authorized person specializing in advising on such investments.

mBank S.A., Pekao Investment Banking S.A. and Trigon Dom Maklerski S.A.  are acting for the Company and are not acting for any other entity in connection with the Offering, will be responsible solely to the Company and will not be responsible to any other entity for providing the protections afforded to their clients nor for providing advice in connection with the Offering.

Statements contained herein may constitute “forward-looking statements”. Forward-looking statements are generally identifiable by the use of the words “is likely to”, “aim”, “may”, “will”, “should”, “plan”, “expect”, “anticipate”, “estimate”, “believe”, “intend”, “project”, “goal” or “target” or the negative of these words or other variations on these words or comparable terminology.

Forward-looking statements involve a number of known and unknown risks, uncertainties and other factors that could cause the Company’s or its industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. The Company does not undertake publicly to update or revise any forward-looking statement that may be made herein, whether as a result of new information, future events or otherwise.