Statement by the Board of Directors of Swedish Stirling in relation to the public takeover offer by TEXEL

Background

This statement is made by the Board of Directors (the “Board”) of Swedish Stirling AB (publ) (“Swedish Stirling” or the “Company”) pursuant to Section II.19 of the Takeover rules for certain trading platforms (the “Takeover Rules”).

On 19 February 2023, the Board announced its intention to propose that the Company initiates an orderly winding-up of the operations by allowing the shareholders to consider a voluntary winding-up. On 24 February 2023, the Company convened an Extraordinary General Meeting to be held on 20 March 2023 to resolve upon a voluntary winding-up. The background to the proposal is that the Board, in its continuous evaluation of the Company’s operations and financial position, including the possibilities of finding a strategic partner and amending the Company’s business model, has concluded that there is no longer a sufficient basis for the continuation of the operations. This conclusion is, in particular, taking into consideration the current level of working capital and that the Board foresee no realistic assumptions for the Company to carry out such additional capital increase as would be necessary to continue the operations and create long-term value for the shareholders. The Board has further been in contact with certain of the Company’s major creditors, including the holders of outstanding convertible loans in the Company, which are not opposing an orderly winding-up of the operations.

In connection with the announcement of the year-end report and the notice of the Extraordinary General Meeting, it was also announced that the Board assessed that there was no alternative to a winding-up.

At the Extraordinary General Meeting on 20 March 2023 it was resolved, upon proposal from a shareholder, that the matter regarding the voluntary winding-up shall be adjourned to a Continued General Meeting to be held on 24 March 2023. The intention is that the Board, at the Continued General Meeting, will present a special balance sheet (Sw. kontrollbalansräkning) which has been reviewed by the Company’s auditors.

 

The Offer

On 19 March 2023, TEXEL Energy Storage AB (”TEXEL”), through a press release, made a combined offer to Swedish Stirling’s shareholders to transfer their shares in Swedish Stirling to TEXEL (the “Offer”). It is further set out in the press release that TEXEL shortly intends to acquire a wholly-owned public subsidiary (the “Offeror Company”) which will formally acquire shares in Swedish Stirling for the purpose of the Offer. Pursuant to the terms of the Offer, TEXEL offers (a) a cash consideration of SEK 0.0991 per share in Swedish Stirling and (b) one (1) existing share in the Offeror Company for each 10,000 tendered shares in Swedish Stirling. TEXEL states that each existing share in the Offeror Company is estimated to have a value of SEK 8.33. For blocks of less than 10,000 shares in Swedish Stirling as well as surplus shares in excess of whole blocks of 10,000 shares in Swedish Stirling, an additional SEK 0.0008 in cash per tendered share in Swedish Stirling is offered as compensation. The Offer is thus corresponding to a total value of approximately SEK 0.0999 per share in Swedish Stirling (the “Offer Price”), corresponding to a total value of approximately SEK 19,400,000.

The Offer Price corresponds to:

•         a premium of approximately 10 per cent compared to the closing price of SEK 0.0901 of Swedish Stirling’s share on Nasdaq First North Premier Growth Market on 17 March 2023, which was the last trading day prior to the announcement of the Offer;

•         a discount of approximately 77 per cent compared to the average price of Swedish Stirling’s share on Nasdaq First North Premier Growth Market during the last 30 trading days prior to the announcement of the Offer; and

•         a discount of approximately 91 per cent compared to the average price of Swedish Stirling’s share on Nasdaq First North Premier Growth Market during the last 90 trading days prior to the announcement of the Offer.

The acceptance period of the Offer is expected to commence on or around 24 April 2023 and expire on or around 2 July 2023.

The completion of the Offer is conditional upon, among other things, TEXEL becoming the owner of more than 50 per cent of the total number of shares in Swedish Stirling (after full dilution upon conversion of all of the Company’s outstanding convertible bonds) and the receipt of all necessary regulatory, governmental or similar clearances, approvals and decisions, in each case on terms which, in TEXEL’s opinion, are acceptable. The Board further notes that the Offer is conditional upon Swedish Stirling not entering into a winding-up or bankruptcy or corporate restructuring proceeding before the expiry of the acceptance period. Accordingly, the Board assumes that the Offer will be withdrawn in the event that the Continued General Meeting, which is planned to be held on 24 March 2023, resolves on voluntary winding-up. Furthermore, TEXEL has reserved the right to waive these and other conditions for completion of the Offer.

The Board has not, as set out in TEXEL’s press release, permitted TEXEL to conduct a limited and confirmatory due diligence review of Swedish Stirling, after the Offer has been made.

Swedish Stirling has engaged Mannheimer Swartling as legal adviser in connection with the Offer.

The Board’s evaluation of the Offer

In assessing the merits of the Offer, the Board has taken a number of factors into account, including the Company’s current financial position, including the ability to continue its operations during the acceptance period as per the indicative timetable. The Board welcomes a public takeover offer to the shareholders but concludes that the proposed indicative timetable with an acceptance period intended to expire on or around 2 July 2023 is not feasible given that, as a result of Swedish Stirling’s financial position, there are no prerequisites to continue the operations during such an extended period.

As to the Offer Price, the Board further notes that larger shareholders (holding more than 10,000 shares) are offered a different consideration (in the form of shares in the Offeror Company) than the majority of Swedish Stirling’s shareholders holding less than 10,000 shares. In addition, the Board notes that TEXEL does not provide further details on which entity being the so-called Offeror Company that makes the Offer and, consequently, not in which entity the shareholders of Swedish Stirling will receive consideration shares.

Under the Takeover Rules the Board is required, on the basis of TEXEL’s statements in the announcement of the Offer or the offer document, to make public its opinion of the effects the implementation of the Offer may have on Swedish Stirling, specifically employment, and its views on TEXEL’s strategic plans for Swedish Stirling and the effects these may be expected to have on employment and the locations where Swedish Stirling carries out its business. Since there is no information from TEXEL in the announcement of the Offer regarding the impact the implementation of the Offer will have on Swedish Stirling, and the offer document has not yet been published, the Board is therefore unable to express an opinion in this regard.

On the basis of an overall assessment, the Board is of the opinion that the Offer, as it is structured according to the indicative timetable, does not provide the shareholders a real opportunity to realise their shareholdings as Swedish Stirling’s financial position does not allow for continued operation during such an extended period. Based on the above, the Board unanimously recommends the shareholders of Swedish Stirling not to accept the Offer.

This statement shall in all respects be governed by and construed in accordance with substantive Swedish law. Disputes arising from this statement shall be settled exclusively by Swedish courts.

 

 

Gothenburg, 22 mars 2023

Swedish Stirling AB (publ)

The Board of Directors

 

This information is information that Swedish Stirling AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out below, at 20:30 CET on 22 March 2023.