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The board of directors in Odd Molly (“Odd Molly” or the “Company”) have, conditional on approval by the annual general meeting on 4 May 2018, resolved on a share issue with pre-emption rights for existing shareholders of approximately MSEK 26.8 before issuing expenses (the “Share Issue”). The purpose of the Share Issue is primarily, from a strong starting point, to finance accelerated investments in sales through digital channels and continued international expansion. The Share Issue is fully covered by subscription and guarantee commitments from the Company’s four largest shareholders.
Further, to satisfy any oversubscription in the Share Issue and thereby bringing additional capital to the Company, the board has resolved to propose to the annual general meeting on 4 May 2018 to authorise the board to resolve on an additional share issue with derogation from the shareholders pre-emption rights of a maximum of 750,000 shares corresponding to approximately MSEK 10.5 (the “Overallotment Option”).
Terms and conditions and additional information regarding the Share Issue and the Overallotment Option
Those who are registered as shareholders in Odd Molly on the record date 25 May 2018 will have pre-emption rights to subscribe for new shares in Odd Molly. For every existing share one (1) subscription right is received. Three (3) subscription rights entitles to subscription of one (1) new share in Odd Molly. Shares not subscribed for by exercise of subscription rights shall primarily be allotted to those who have subscribed for shares by exercise of subscription rights and have subscribed for additional shares without exercise of subscription rights, and secondly be allotted to others that have subscribed without the use of subscription rights. The subscription price is SEK 14.0 per share. A maximum of 1,917,333 shares will be issued in the Share Issue corresponding to approximately MSEK 26.8 before issuing expenses.
To enable for the Company to satisfy any oversubscription in the Share Issue and thereby bringing additional capital to the Company, the board has resolved to propose to the annual general meeting on 4 May 2018 to authorise the board a possibility to, with derogation from the shareholders’ pre-emption rights, resolve on an additional share issue in the form of a so-called overallotment option of a maximum of 750,000 shares at a subscription price of SEK 14.0 per share. The right to subscribe for shares in the Overallotment Option shall vest in those persons who have applied for subscription in the Share Issue without receiving full allotment. Provided that the Overallotment Option is fully subscribed, the Company will receive an additional MSEK 10.5 before issue expenses.
The board’s resolution on the Share Issue and authorisation of the Overallotment Option is subject to approval by the annual general meeting, which will be held on 4 May 2018 at 14:00 CEST in the showroom of the Company on Karlavägen 73 in Stockholm, Sweden. Notice to attend the annual general meeting will be announced via a separate press release.
Shares and share capital
Provided that the Share Issue and the Overallotment Option are fully subscribed, 2,667,333 shares will be issued at a subscription price of SEK 14.0 per share. Thus, Odd Molly will receive approximately MSEK 37.3 before issue expenses. Provided that the Share Issue is fully subscribed and the Overallotment Option is utilised in full, the Company’s share capital will increase by SEK 266,733.3 to a total amount of SEK 841,933.3.
Provided that the Share Issue is fully subscribed, shareholders who choose not to participate in the Share Issue will be diluted by approximately 25.0 per cent. The dilutive effect of the Overallotment Option alone will be a maximum of approximately 8.9 per cent. Provided that the Share Issue is fully subscribed and that the Overallotment Option is fully utilised the total dilution for shareholders who choose not to participate in the Share Issue will correspond to approximately 31.7 per cent. Shareholders are able to financially compensate for the dilutive effect by selling their subscription rights.
Subscription and guarantee commitments
The shareholders Kattvik Financial Services AB, M2 Capital Management AB, ATV Holding AB and New Moon Förvaltning AB, together holding approximately 60.5 per cent of the total number of shares in the Company, have undertaken to subscribe for their respective pro rata share in the Share Issue. Also, the same shareholders have undertaken to guarantee the Share Issue up to an amount of approximately MSEK 10.6, corresponding to approximately 39.5 per cent of the Share Issue. No consideration will be paid in relation to the guarantee commitments. No liquid funds or other assets have been pledged to ensure the commitments. The Share Issue is thus fully covered by subscription and guarantee commitments. Further, the above shareholders have undertaken to vote for the Share Issue at the annual general meeting on 4 May 2018.
Prospectus
Following the Share Issue and the Overallotment Option and provided that the annual general meeting approves and resolves of the same, Odd Molly will issue a prospectus which will be published when the Swedish Financial Supervision Authority (Sw. Finansinspektionen) has approved the prospectus. Such approval is expected to be given on or about 29 May 2018.
Background and rationale
Odd Molly is a Swedish company that designs, markets and sells fashion and related lifestyle products for girls. The collections are based on a distinguished style concept and the Company is driven by strong values. Odd Molly’s products are sold through own channels as well as through sales teams and agents to external retailers. An increasing proportion of sales are derived from Odd Molly’s own channels, mainly the Company’s webshop, which reaches more than 40 countries.
Odd Molly has an established position with high brand awareness and strong growth of sales via digital channels, which makes the Company well positioned to face the profound changes that take place in the market, entailing a shift towards increased e-commerce consumption. To Odd Molly, the change is clearly observable through the increasing sales via digital channels, while the development of sales via traditional retailers is weaker.
For several years, Odd Molly has focused on increasing its control over distribution and the proportion of sales via digital channels. This has resulted in that more than 50 per cent of the sales for 2017 derived from the Company’s own sales channels (stores and web shop) and that 40 per cent of total sales derived from digital channels (internal and external e-commerce).
Furthermore, Odd Molly has 18 own stores which represent a considerable proportion of the total sales. At the same time, the stores have an important function in strengthening Odd Molly’s brand and to boost the sales via the Company’s web shop. The online sales are expected to continue to grow, while sales via the Company’s stores are expected to have a more limited development in the future. The Company may optimize the number of own stores in the future.
In 2017, the Swedish market accounted for approximately 70 per cent of the total sales of Odd Molly’s products. The Company sees great potential to strengthen its brand position outside the Swedish market and the Company intends to increase its focus on sales activities directed to the international market, including local and international e-retailers.
Through increased marketing efforts and IT investments, Odd Molly sees good opportunities in boosting the sales via the Company’s own channels, focusing on e-commerce. Increased sales via the Company’s own channels entail better conditions for profitability, while the need for working capital in the Company increases. The transformation that has been in progress for a few years will now be accelerated, including refocusing of resources as well as optimization of the organization and working methods.
Odd Molly has a strong starting point and in order to take advantage of the growth opportunities, for swift adaptation and to satisfy the increased need for working capital due to an increased proportion of sales in the Company’s own channels, the board of directors has decided to conduct the Share Issue.
Preliminary timetable of the Share Issue
- 4 May 2018 Resolution on the Share Issue on the annual general meeting of the Company
- 23 May 2018 Last day to trade the share including the right to participate in the Share Issue
- 24 May 2018 First day to trade the share excluding the right to participate in the Share Issue
- 25 May 2018 Record date for participation in the Share Issue
- 29 May 2018 Expected date for publishing of prospectus
- 30 May – 13 June 2018 Subscription period
- 30 May – 11 June 2018 Trading in subscription rights
- 19 June 2018 Expected date for announcement of the outcome in the Share Issue
Advisers
Erik Penser Bank AB is acting as financial advisor and MAQS Advokatbyrå is acting legal advisor to Odd Molly in connection to the Share Issue and the Overallotment Option.
Important Information
The information in this press release does contain or constitute an offer to acquire, subscribe or otherwise trade in shares in Odd Molly. The information in this press release does not contain or constitute an offer to acquire, subscribe or otherwise trade in shares or other securities in Odd Molly. No action has been taken and measures will not be taken to permit a public offering in any jurisdictions other than Sweden. Any invitation to the persons concerned to subscribe for shares in Odd Molly will only be made through the prospectus that Odd Molly estimates to publish on or around 29 May 2018.
The information in this press release may not be released, published or distributed, directly or indirectly, in or into the United States (including its territories and provinces, every state in the United States and the District of Columbia) (“USA”), Canada, Australia, Japan, Hong Kong, Switzerland, New Zealand, Singapore, South Africa or any other jurisdiction in which such action is subject to legal restrictions or would require other measures than those required by Swedish law. Actions in violation of these restrictions may constitute a violation of applicable securities laws.
No shares or other securities in Odd Molly have been registered, and no shares or other securities will be registered, under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or the securities legislation of any state or other jurisdiction in the United States and no shares or other securities may be offered, sold or otherwise transferred, directly or indirectly, in or into the United States, except under an available exemption from, or in a transaction not subject to, the registration requirements under the U.S. Securities Act and in compliance with the securities legislation in the relevant state or any other jurisdiction of the United States.
For additional information, please contact:
Patrik Tillman, chairman of the board
+46 733 50 61 20
Johanna Palm, CFO
+46 760 10 24 55
This information is information that Odd Molly is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication through the agency of the contact persons set out above, on 5 April 2018, at 08.55 CEST.
About Odd Molly
Odd Molly is a Swedish company that designs, markets and sells distinctive fashion. The Company’s products are mainly sold through own channels as well as through own sales teams and external agents to retailers. An increasing proportion of sales are derived from Odd Molly’s own channels, mainly the Company’s webshop, which reaches more than 40 countries. Furthermore, Odd Molly has 18 own stores as well as stores managed by partners on selected markets. The Odd Molly share is traded on Nasdaq Stockholm, small cap. Read more on logistea.se.
Odd Molly International AB, Kornhamnstorg 6, 111 27 STOCKHOLM, Sweden, Phone: +46 8 522 28 500, www.oddmolly.com