Inside information: Citycon Oyj explores the conditions to carry out a directed share issue of up to 11.9 million new shares and plans other measures to further strengthen its balances sheet

CITYCON OYJ    Inside information   22 February 2024 at 18:35 hrs

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, HONG KONG, SOUTH AFRICA, SINGAPORE, NEW ZEALAND OR JAPAN OR IN ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL OR WOULD REQUIRE REGISTRATION OR ANY OTHER MEASURES.

Citycon Oyj (“Citycon” or the “Company”) explores the conditions to carry out a directed share issue of up to 11.9 million new shares in the Company (the “Shares”), corresponding to up to approximately 6.9 per cent of all shares in the Company prior to the directed share issue, by means of an accelerated bookbuilding process (the “Placing”). The Placing would be directed only to eligible Finnish and international institutional and other qualified investors.

The Placing would be carried out based on the authorisation granted to the Board of Directors by the Company’s Annual General Meeting held on 21 March 2023. The subscription price and the total number of Shares to be offered in the Placing would be determined based on offers received in the Placing. The Company has retained Deutsche Bank Aktiengesellschaft (“Deutsche Bank”) and Skandinaviska Enskilda Banken AB (publ) Helsinki branch (“SEB”) as Joint Bookrunners in connection with the Placing.

The Placing will be launched immediately following the publication of this stock exchange release and is expected to end no later than at 9:00 a.m. EET on 23 February 2024 (the “Placing Period”). The bookbuilding may, however, be closed at any time during the Placing Period. After the close of the Placing, the Board of Directors of the Company will make the decision on the Placing, including acceptance of the received offers, the number of Shares to be issued and the subscription price per Share. The final number and subscription price will be published by way of a stock exchange release after the close of the Placing.

The net proceeds from the Placing are intended to be used to strengthen the Company’s balance sheet by repaying the Company’s outstanding debt, and thus, improving its capital structure in the current market environment, while doing so in a rapid and cost-effective manner that, in the assessment of the Company, would otherwise not be available in the current market conditions. The capital structure and balance sheet strengthening would also support the Company in maintaining its investment grade credit rating. There are, therefore, weighty financial reasons for the Company to deviate from shareholders’ pre-emptive subscription rights.

The Company aims to continue assessing its balance sheet position and may undertake other ordinary course capital markets transactions to optimise its capital structure in the near future, including refinancing by issuing a new bond and repurchasing its bonds maturing in 2024, subject to market conditions.

In the Board of Directors’ assessment, the subscription price per Share is expected to be in accordance with the prevailing market conditions since it would be determined through an accelerated bookbuilding procedure.

G City Ltd, who currently owns, together with its wholly-owned subsidiary Gazit Europe Netherlands, 50.91 per cent of the total shares and votes in the Company, has committed to subscribe 3.7 million Shares in the Placing. Pursuant to an approval by the FIN-FSA relating to a mandatory tender offer exemption, G City Ltd’s aggregate shareholding must be below 50 per cent of the total shares and votes in the Company after the completion of the Placing. Ilmarinen Mutual Pension Insurance Company is supportive of, and intends to participate in, the Placing.

In connection with the Placing, the Company has agreed to enter into a lock-up undertaking, according to which it will, subject to certain customary exceptions and/or waiver by the Joint Bookrunners, undertake not to issue or sell shares in the Company during a period of 90 days after the completion of the Placing.

Subject to the completion of the Placing, the Shares would be registered with the Finnish Trade Register on or about 23 February 2024. The Shares are expected to be ready for delivery to the investors against payment through Euroclear Finland Ltd on or about 27 February 2024. Trading in the Shares is expected to commence on the official list of Nasdaq Helsinki Ltd on or about 27 February 2024. The Shares would rank pari passu in all respects with the existing shares of the Company once they have been entered in the Finnish Trade Register.

Deutsche Bank and SEB act as Joint Bookrunners of the Placing. Hannes Snellman Attorneys Ltd and Milbank LLP are acting as the legal advisers to the Company and Roschier, Attorneys Ltd. is acting as the legal adviser to the Joint Bookrunners.

Citycon Oyj

Board of Directors

For further information, please contact:  
Sakari Järvelä
Chief Financial Officer
Tel. +358 50 387 8180
[email protected]

Citycon is a leading owner, manager and developer of mixed-use real estate featuring modern, necessity-based retail with residential, office and municipal service spaces that enhance the communities in which they operate. Citycon is committed to sustainable property management in the Nordic region with assets that total approximately EUR 4.0 billion. Our centres are located in urban hubs in the heart of vibrant communities with direct connections to public transport and anchored by grocery, healthcare and other services that cater to the everyday needs of customers.

Citycon has investment-grade credit rating from Standard & Poor's (BBB-). Citycon’s shares are listed on Nasdaq Helsinki Ltd.

www.citycon.com

Forward-Looking Statements

This release contains forward-looking statements, including, without limitation, statements regarding Citycon’s strategy, business plans and focus. The words “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “target” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Any forward-looking statements in this release are based on management’s current expectations and beliefs and are subject to a number of risks, uncertainties and important factors that may cause actual events or results to differ materially from those expressed or implied by any forward-looking statements contained in this release, including, without limitation, any related to Citycon’s business, operations, supply chain, strategy, goals and anticipated timelines and competition from other companies. Citycon cautions you not to place undue reliance on any forward-looking statements, which speak only as of the date they are made. Citycon disclaims any obligation to publicly update or revise any such statements to reflect any change in expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements. Any forward-looking statements contained in this release represent Citycon’s views only as of the date hereof and should not be relied upon as representing its views as of any subsequent date.

Important notice

The information contained herein shall not constitute an offer to sell or the solicitation of any offer to buy or subscribe for, nor shall there be any sale of the securities referred to herein in any jurisdiction.

The information contained herein may not be announced, published, copied, reproduced or distributed, directly or indirectly, in whole or in part, within or into the United States, Australia, Canada, Hong Kong, South Africa, Singapore, New Zealand or Japan or in any other jurisdiction in which such announcement, publication or distribution would not comply with applicable laws and regulations or where such actions are subject to legal restrictions or would require additional registration or other measures than what is required under Finnish law. This press release does not constitute an offer of securities for sale in the United States, nor may the securities be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements under the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder. There is no intention to register any portion of the offering in the United States or to conduct a public offering of the securities in the United States. Any sale of the issued Shares in the United States will be made solely to “qualified institutional buyers” as defined in rule 144A in reliance on an exemption from the registration requirements of the U.S. Securities Act.

In any EEA Member State, this announcement is only addressed to and is only directed at qualified investors in that Member State within the meaning of Regulation (EU) 2017/1129 (“Prospectus Regulation”) (“Relevant Persons”). Persons who are not Relevant Persons should not take any action on the basis of this announcement and should not act or rely on it.

Deutsche Bank Aktiengesellschaft and Skandinaviska Enskilda Banken AB (publ) Helsinki branch act only for and on behalf of the Company in connection of the Placing. Deutsche Bank Aktiengesellschaft and Skandinaviska Enskilda Banken AB (publ) Helsinki branch do not hold any other party as their client or cannot be held accountable to advise or indemnify other parties than the Company with regards to the Placing or other matters referred here to.