Inside information: Remedy enters into a EUR 15 million convertible loan agreement with Tencent
Remedy Entertainment Plc Inside information September 27, 2024, at 9.00 a.m. EEST
Inside information: Remedy enters into a EUR 15 million convertible loan agreement with Tencent
Remedy Entertainment Plc (“Remedy” or “Company”) has today signed a Convertible Loan Agreement with an affiliate of Tencent Holdings Limited (“Tencent”) to issue a EUR 15 million unsecured convertible loan (“loan”). The loan carries an 8% annual non-cash interest and has a fixed conversion rate of EUR 27.2 per share, corresponding to a 63.86% premium of the closing price for Remedy’s shares on Nasdaq Helsinki on 26 September 2024. The loan is subject to approval by Remedy’s Extraordinary General Meeting, which is expected to be held by 24 October 2024. Remedy will publish the invitation to call the Extraordinary General Meeting separately. The loan will be paid to Remedy according to the Convertible Loan Agreement after the Extraordinary General Meeting’s approval and fulfillment of certain customary conditions for drawdown, including the Board of Directors of Remedy having approved the loan and the issuance of the related convertible rights to Tencent.
The main terms of the loan are as follows:
- Amount: EUR 15 million.
- Instrument: an unsecured loan that is convertible into new Remedy shares under certain circumstances.
- PIK (non-cash) interest: 8% per annum, which shall be capitalized to the balance of the loan annually on each 31 December.
- Maturity if conversion right or early repayment right is not exercised: 5 years from drawdown.
- Conversion: from the 3rd anniversary of the drawdown, Tencent shall have the right to convert the loan into new Remedy shares in accordance with the terms and conditions of the convertible rights to be issued to Tencent.
- Conversion price per share: EUR 27.2, subject to customary adjustments for certain specified corporate events, as well as customary anti-dilution adjustments, as set out in the terms and conditions of the convertible rights. This conversion price entails that the loan can be converted into a maximum of approximately 811,100 new Remedy shares, representing approximately 5.98 percent of all shares in Remedy on the date hereof.
- Early repayment: from the 3rd anniversary of the drawdown, Remedy has the right to repay the loan by paying the principal amount plus accrued PIK-interest, subject to:
- The volume-weighted average price (VWAP) of Remedy’s share on Nasdaq Helsinki stock exchange exceeding 130% of the conversion price (i.e., being at least EUR 35.36) over 20 consecutive trading days; and
- Tencent not electing to exercise its conversion right.
Aream & Co acted as financial advisor to Remedy in the transaction.
“Part of Remedy's long-term strategy has been to strengthen our position in the value chain, to have more control over how our games are commercialized, and to grow our share of the value these games can create. As we move towards self-publishing, this financing will support us in developing and fully realizing the potential of the games we have in development and successfully carrying out the commercial activities of our next self-published games. Tencent’s investment demonstrates strong confidence in Remedy's long-term vision and strategy,” commented Remedy’s CEO, Tero Virtala.
REMEDY ENTERTAINMENT PLC
More information
Tero Virtala, CEO
Phone: +358 9 435 5040
Email: [email protected]
Liisa Eloranta, Investor Relations Manager
Phone: +358 50 4334992
Email: [email protected]
Remedy in brief
Remedy Entertainment Plc is a pioneering, globally renowned video game company founded in 1995 and headquartered in Finland with an office in Stockholm, Sweden. Known for its story-driven and visually stunning action games, Remedy has created multiple successful, critically acclaimed franchises such as Control, Alan Wake and Max Payne. Remedy also develops its own Northlight game engine and tools technology that powers many of its games. Remedy’s shares are listed on Nasdaq Helsinki’s official list.
