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Cognor Holding files prospectus

Cognor Holding has filed a prospectus with the Polish Financial Supervision Authority in connection with a planned public share offering. The company expects to raise at least PLN 101 million gross to re-finance a part of its debt.

Cognor Holding (“Company“), based on resolution 2 adopted by the Extraordinary General Meeting on 25 April 2017, intends to issue from 25.1 million to 67.3 million shares series 11, with nominal value of PLN 1.5, without pre-emptive rights, in the course of a public offering. At the same time, the prospectus also covers the offering of up to 16 million in-kind contribution shares series 12 in the form of a private subscription, which will be issued in exchange for a non-cash contribution provided by PS Holdco – the Company’s principal shareholder – in the form of 100 shares in Odlewnia Metali Szopienice sp. z o.o. The value of the in-kind contribution is PLN 24 million, which denotes a more than 20% discount to the fair value of the in-kind contribution, established in accordance with a 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.

“We are formally starting the next step in the Group’s strategic process aimed at fundamentally re-financing our debt. We want to raise no less than PLN 101 million gross from investors, which will be used to buy back a part of secured bonds issued on foreign markets, worth approx. EUR 80.9 million,” said Krzysztof Zoła, Cognor Holding’s CFO and management board member.

Let us recall that in May of this year, the Company received a letter from its banks with a commitment to provide bank financing for the same purpose in the amount of EUR 50 million. Interest on the credit facility is based on WIBOR or EURIBOR plus margin on market terms for this type of transaction. For comparison, current interest on the bonds that are to be repaid with the credit facility and a share issue is 12.5% annualised. The granting of this financing is subject to compliance with certain conditions, including negotiating and signing financial documentation. “Replacing debt with equity and loans on market terms will make it possible for us to generate substantial savings. We estimate that the new financing structure will reduce our finance costs by at least PLN 25 million per year, starting from 2018,” said Krzysztof Zoła.

The prospectus is expected to be approved after the summer holidays. The public offering will commence immediately after the Polish Financial Supervision Authority approves the prospectus. Shareholders owning at least 0.5% of the Company’s share capital will have priority in purchasing these shares.

According to the schedule, the Company plans to complete the re-financing process at the end of the third and start of the fourth quarter of 2017.

Disclaimer

This document (and the information contained therein) does not include or constitute an offer to sell securities or an invitation to submit an offer to purchase securities in the United States, Australia, Canada, Japan and any other jurisdiction where such an offer or invitation would be illegal. The securities referred to in this document are not and will not be registered in accordance with the US Securities Act 1933, as amended, and cannot be offered or sold in the United States unless they are registered in accordance with the US Securities Act 1933 or are exempt from the registration requirement pursuant to the US Securities Act 1933. No public offering of securities will be conducted in the United States, and Cognor Holding S.A. (“Company”) does not plan to pursue registration pursuant to the US Securities Act 1933.

This document is purely promotional and does not constitute a prospectus in the meaning of the legal regulations through which Directive 2003/71/EC (as amended) was implemented (this Directive together with the legal regulations through which it was implemented in a given Member State and other relevant laws hereinafter referred to as “Prospectus Directive”) and does not constitute an offer to sell or an invitation to purchase securities. Once approved by the Polish Financial Supervision Authority and published, the prospectus will be the sole binding offering document containing information about the Company and the offered securities in Poland as well as on their admission and introduction to trading on a regulated market managed by Giełda Papierów Wartościowych w Warszawie S.A. (“Offering”).

The release of this document in certain countries may be prohibited. The distribution of this document in Canada, Japan and Australia is prohibited. The information contained in this document does not include or constitute an offer to sell securities or an invitation to submit an offer to purchase securities in Canada, Japan and Australia.

In Great Britain, this material is addressed solely to investment professionals in the meaning of art. 19 sec. 5 of Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, and to entities with a high net asset worth that are authorised to receive this message pursuant to art. 49 sec. 2 of Financial Services and Markets Act 2000 (all such entities hereinafter collectively referred to as “authorised entities”). All investment activities that this material pertains to will be taken or executed with authorised entities only. Persons other than authorised entities should not take any such measures or relay on the information contained in this material. The offering will not be conducted as a public offering in Great Britain.

In EU member states, except Great Britain, this material is addressed solely to “qualified investors” in the meaning of art. 2 sec. 1 point e) of the Prospectus Directive (“Qualified Investors”) or pursuant to the exemption specified in art. 3 sec. 2 of the Prospectus Directive. It is considered that Qualified Investors represent that they are not purchasing securities within the Offering on behalf of persons other than Qualified Investors.

This material does not constitute a recommendation in the meaning of the Ordinance of the Minister of Finance dated 19 October 2005 on information constituting recommendations related to financial instruments and their issuers.

Forward-looking statements refer to known and unknown issues that carry risk and uncertainty or other important factors that may cause the Company’s actual results, achievements and developments to significantly differ from the results, achievements and developments included in or resulting from these statements. The Company is under no obligation to disclose updates or corrections of the forward-looking statements contained in this material in light of any new information, future events or other circumstances.