Hamilton, Bermuda, 7 March 2023
Reference is made to the stock exchange announcement made by Archer Limited (“Archer“, the “Company” and together with its subsidiaries, the “Group“) on 6 March 2023 regarding a contemplated private placement (the “Private Placement“) of new common shares in the Company (the “New Shares“).
The Company is pleased to announce that it has raised the NOK equivalent of USD 100 million in gross proceeds through the Private Placement of 1,040,000,000 new common shares at a subscription price of NOK 1 per share (the “Subscription Price“). The Private Placement was carried out on the basis of an accelerated bookbuilding process managed by DNB Markets, a part of DNB Bank ASA, Pareto Securities AS, Skandinaviska Enskilda Banken AB (publ), Oslo Branch, SpareBank 1 Markets AS and Arctic Securities AS, as joint bookrunners in the Private Placement (the “Managers“).
The Private Placement is divided in two separate tranches, where the first tranche (“Tranche 1“) consists of 618,800,000 New Shares (the “Tranche 1 Shares“) and the second tranche (“Tranche 2“) consists of the remaining 421,200,000 New Shares in the Private Placement (the “Tranche 2 Shares“).
The net proceeds from the Private Placement will be used to retire existing debt. In the event that the conditions for completion Tranche 2 are not satisfied, the net proceeds from Tranche 1 will be used to retire part of the Company’s current debt arrangements.
Allocation to pre-committing investors and primary insiders:
One of the Company’s largest shareholders, Hemen Holding Ltd. (“Hemen”), subscribed for, and was allocated, New Shares for the NOK equivalent of USD 25.0 million in the Private Placement. The Company’s largest shareholder, Paratus Energy Services Limited (“Paratus”), subscribed for, and was allocated, New Shares for the NOK equivalent of USD 15.5 million. The CEO and CFO in Archer subscribed for, and were allocated, New Shares for NOK 1 million and NOK 400,000, respectively. Jan Erik Klepsland, which is part of the Board, subscribed for, and was allocated, New Shares for NOK 500,000.
Settlement:
Notification of allocations and settlement instructions for the Private Placement is expected to be distributed by the Managers to the applicants on 7 March 2023. Hemen and Paratus have been conditionally allocated the Tranche 2 Shares, meaning that the other investors have been allocated Tranche 1 Shares.
Settlement of the Tranche 1 Shares is expected to take place on or about 9 March 2023 on a delivery versus payment (DVP) basis. The Tranche 1 Shares will be issued on separate ISIN no. BMG0451H1410 pending approval and publication of a prospectus for the listing of the New Shares and for the Subsequent Offering (as defined below). Settlement of Tranche 2 Shares is expected to take place on or about 30 March 2023 on a DVP basis.
The Company and DNB Markets, a part of DNB Bank ASA, have entered into a pre-funding agreement in order to facilitate swift registration of the share capital increase pertaining to the Shares and subsequent DVP settlement of the Shares in each respective tranche (the “Pre-Funding Agreement“).
Following the issue of the Tranche 1 Shares, the Company’s issued share capital will be USD 7,675,586.12 divided on 767,558,612 common shares, each with a par value of USD 0.01. Following, and subject to, the successful completion of Tranche 2, the Company’s issued share capital will be increased to USD 11,887,586.12, divided on 1,188,758,612 Shares, each with a par value of USD 0.01.
Completion of the Private Placement:
Completion of Tranche 1 is subject to: (i) All necessary corporate resolutions being validly made by the Company including, without limitation the Board resolving to consummate the Private Placement and to issue the Tranche 1 Shares based on the Company’s currently authorized but unissued share capital (ii) the Pre-Funding Agreement being entered into and remaining in full force and effect with respect to the Tranche 1 Shares; and (iii) registration of the Tranche 1 Shares with Euronext Securities Oslo (the “VPS”) .
Completion of Tranche 2 is subject to: (i) All necessary corporate resolutions being validly made by the Company including, without limitation (a) the Board resolving to consummate the Private Placement; and (b) the SGM resolving to increase the Company’s authorized share capital with the amount required to issue the Tranche 2 Shares, and the Board thereafter resolving to issue the Tranche 2 Shares, (ii) the Pre-Funding Agreement being entered into and remaining in full force and effect with respect to the Tranche 2 Shares; and (iii) registration of the Tranche 2 Shares with the VPS.
Tranche 1 is not conditional upon Tranche 2, and the Tranche 1 Shares delivered to investors will be validly issued and final regardless of whether the conditions for completion of Tranche 2 are satisfied.
An authorization for the Board to issue the Tranche 2 Shares (through increase of the Company’s authorized share capital) is expected to be granted by the special general meeting of the Company (the “SGM“) to be held on or about 28 March 2023. Investors who were allocated shares in Tranche 1 have undertaken an obligation to attend the SGM and vote in favor of the resolutions relating to Tranche 2 as proposed by the Board.
Subsequent Offering:
The Private Placement represents a deviation from the shareholders’ pre-emptive right to subscribe for the New Shares. The Board has considered the Private Placement in light of the equal treatment obligations under applicable regulations and is of the opinion that the waiver of the preferential rights inherent in a private placement, taking into consideration the time, costs and risk of alternative methods of the securing the desired funding, is in the common interest of the shareholders of the Company. In addition, to limit the dilutive effect of the Private Placement, the Board has resolved to carry out a subsequent offering (the “Subsequent Offering“).
The Subsequent Offering will consist of up to 228,800,000 new common shares in the Company, each with a par value of USD 0.01, for gross proceeds of up to the NOK equivalent of USD 22 million (equal to up to 22% of the size of the Private Placement). The Subsequent Offering will, on the basis of a prospectus, be directed towards existing eligible shareholders in the Company as of 6 March 2023 (as registered with the VPS two trading days thereafter (the “Record Date”)) who (i) were not allocated Offer Shares in the Private Placement, and (ii) are not resident in a jurisdiction where such offering would be unlawful, or would (in jurisdictions other than Norway) require any prospectus filing, registration or similar action.
Completion of the Subsequent Offering will, inter alia, be subject to (i) completion of Tranche 1 of the Private Placement, (ii) relevant corporate resolutions, including approval by the Company’s board of directors, (iii) prevailing market price of the Company’s shares, including the price of the Company’s shares not trading below the offer price in the Subsequent Offering over a period with sufficient liquidity, and (iv) the publication of an offering prospectus approved by the Financial Supervisory Authority of Norway.
The subscription period for the Subsequent Offering is expected to commence as soon as possible after fulfilment of the conditions set out above. The subscription price per share in the Subsequent Offering will be the same as in the Private Placement. The Company reserves the right, in its sole discretion, to cancel the Subsequent Offering in its entirety due to market conditions.
Advisors:
DNB Markets, part of DNB Bank ASA (“DNB Markets”), Pareto Securities AS, Sparebank 1 Markets, Skandinavia Enskildabanken AB (Public) Oslo Branch and Arctic Securities AS are acting as Joint Bookrunners for the Private Placement (jointly the “Managers”).
DNB Markets is acting as financial adviser to the Company in connection with the refinancing.
Fulcrum Advisory Partners LLP (“Fulcrum Partners”) provided consultancy services to the Company in connection with the Refinancing.
Advokatfirmaet Schjødt AS is acting as legal advisor to the Company and Advokatfirmaet Wiersholm AS is acting as legal advisors to the Managers.
For additional information, please contact:
Dag Skindlo, Chief Executive Officer
Mobile: +47 982 26 624
Email: dag.skindlo@archerwell.com
Espen Joranger, Chief Financial Officer
Mobile: +47 982 06 812
Email: espen.joranger@archerwell.com
Joachim Houeland, Manager Treasury and Investor Relations
Mobile: +47 482 78 748
Email: joachim.houeland@archerwell.com
Additional information about the Company can be found at:
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Important information:
This announcement is not and does not form a part of any offer to sell, or a solicitation of an offer to purchase, any securities of the Company. Copies of this announcement are not being made and may not be distributed or sent into any jurisdiction in which such distribution would be unlawful or would require registration or other measures.
The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and accordingly may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and in accordance with applicable U.S. state securities laws. The Company does not intend to register any part of the offering in the United States or to conduct a public offering of securities in the United States. Any sale in the United States of the securities mentioned in this announcement will be made solely to “qualified institutional buyers” as defined in Rule 144A under the Securities Act.
In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The “Prospectus Regulation” means Regulation (EU) 2017/1129, as amended (together with any applicable implementing measures) in any Member State.
This communication is only being distributed to and is only directed at persons in the United Kingdom that are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) or (ii) high net worth entities, and other persons to whom this announcement may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investments activity to which this communication relates is available only for relevant persons and will be engaged in only with relevant persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.
The issue, subscription or purchase of shares or other financial instruments in the Company is subject to specific legal or regulatory restrictions in certain jurisdictions. Neither the Company nor the Managers assume any responsibility in the event there is a violation by any person of such restrictions. The distribution of this release may in certain jurisdictions be restricted by law. Persons into whose possession this release 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.
Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as “believe”, “expect”, “anticipate”, “strategy”, “intends”, “estimate”, “will”, “may”, “continue”, “should” and similar expressions. Any forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Such assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The Company does not make any guarantee that the assumptions underlying any forward-looking statements in this announcement are free from errors nor does it accept any responsibility for the future accuracy of the opinions expressed in this announcement or any obligation to update or revise the statements in this announcement to reflect subsequent events. You should not place undue reliance on any forward-looking statements in this announcement. The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice. The Company does not undertake any obligation to review, update, confirm, or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this announcement.
This announcement is made by and, and is the responsibility of, the Company. The Managers are acting exclusively for the Company and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, or for advice in relation to the contents of this announcement or any of the matters referred to herein. Neither the Managers nor any of their respective affiliates makes any representation as to the accuracy or completeness of this announcement and none of them accepts any responsibility for the contents of this announcement or any matters referred to herein.
This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities of the Company. The distribution of this announcement and other information may be restricted by law in certain jurisdictions. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions. This announcement is an advertisement and is not a prospectus for the purposes of the Prospectus Regulation as implemented in any Member State.