Outokumpu launches a senior unsecured convertible bond offering of approximately EUR 130 million due 2025

NOT FOR DISTRIBUTION OR RELEASE IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ITALY, OR ANY OTHER JURISDICTION IN WHICH OFFERS OR SALES WOULD BE PROHIBITED BY APPLICABLE LAW.

Outokumpu Oyj
Inside information
July 2, 2020 at 18.35 pm EEST

THIS STOCK EXCHANGE RELEASE AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, SOUTH AFRICA, ITALY OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

Outokumpu Oyj (“Outokumpu” or the “Company”) announces the launch of an offering (the “Offering”) of senior unsecured convertible bonds due July 2025 (the “New Convertible Bonds”) convertible into new and/or existing ordinary shares of Outokumpu (the “Shares”) through an accelerated book building process to institutional investors. The New Convertible Bonds are expected to be issued in an aggregate initial principal amount of approximately EUR 130 million.

The contemplated transaction takes advantage of the current financing environment and aims to optimise Outokumpu’s capital structure through the issuance of the New Convertible Bonds. The issue of the New Convertible Bonds will enable Outokumpu to extend its debt maturity profile and the proceeds from the New Convertible Bonds will be used for general corporate purposes and prepayment of debt.

New Convertible Bonds

The New Convertible Bonds will be issued at 100% of their principal amount of EUR 100,000 per bond and – unless previously converted, repurchased or redeemed – will be redeemed at par at maturity. The New Convertible Bonds are expected to carry a coupon of 4.25% - 5.25% per annum payable semi-annually in arrear in equal instalments on 9 January and 9 July each year, with the first interest payment date being January 9, 2021. The initial conversion price is expected to be set at a premium of 32.5% - 37.5% above the reference share price, which will be equal to the placement price of the Shares in the Concurrent Accelerated Bookbuilding (as defined and further described below). The conversion price will be subject to (a) adjustments for any dividends in cash or in kind, as well as (b) customary anti-dilution adjustments, pursuant to the terms and conditions of the New Convertible Bonds.

The Shares underlying the New Convertible Bonds represent approximately 9% of the total number of Outokumpu's issued and outstanding Shares immediately prior to the Offering, subject to potential adjustments to the conversion price.

The Sole Global Coordinator will also conduct, concurrently with the placement of the New Convertible Bonds, a simultaneous placement of existing Shares (the “Concurrent Accelerated Bookbuilding”) on behalf of subscribers of the New Convertible Bonds who wish to sell such Shares in short sales in order to hedge the market risk of an investment in the New Convertible Bonds. The Company will not receive any proceeds from the Concurrent Accelerated Bookbuilding.

The final terms of the New Convertible Bonds, including the initial conversion price and the price of the Shares sold in the Concurrent Accelerated Bookbuilding, are expected to be announced later today.

Settlement and delivery of the New Convertible Bonds is expected to take place on or about 9 July, 2020. Outokumpu will submit an application to admit the New Convertible Bonds to listing and trading on the Open Market (Freiverkehr) segment of the Frankfurt Stock Exchange or on another internationally recognized, regularly operating, regulated or non-regulated stock exchange by no later than 90 days after the settlement date.

Outokumpu has agreed to a lock-up for a period commencing on the pricing date of the Offering and ending 90 calendar days after the settlement date of the Offering, subject to customary exceptions.

This stock exchange release does not constitute an offer or invitation to subscribe the New Convertible Bonds and the Offering does not constitute a public offering in any jurisdiction.

The distribution of this stock exchange release in certain jurisdictions may be restricted by law. Persons into whose possession this stock exchange release comes are required by Outokumpu and the Managers to inform themselves about and to observe any such restrictions.

Inside information notice

This stock exchange release relates to the disclosure of information that qualified, or may have qualified, as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation (Regulation (EU) No. 596/2014) (“MAR”).

Citigroup Global Markets Limited is acting as Sole Global Coordinator and Joint Bookrunner for the Offering and BNP PARIBAS, Crédit Agricole Corporate and Investment Bank, SEB Debt Capital Markets and Swedbank AB (publ) (in cooperation with Kepler Cheuvreux S.A.) are acting as Joint Bookrunners (together with the Sole Global Coordinator, the “Managers”).

Contact details of the Sole Global Coordinator and the Joint Bookrunners are as follows:

Sole Global Coordinator and Joint Bookrunner:

Citigroup Global Markets Limited
Citigroup Centre
33 Canada Square
London E14 5LB
United Kingdom

Attn: Equity Syndicate Desk
Tel: + 44 20 7986 0015
Fax: + 44 20 3364 2134
E-mail: emeaecm.notices@citi.com

Attn: Equity-Linked Sales
Tel: +44 20 7986 0390
E-mail: gary.sheldon@citi.com

Joint Bookrunners:

BNP PARIBAS
4, rue d'Antin
75002 Paris
France

10 Harewood Avenue
London NW1 6AA
United Kingdom

Attn: Equity-linked Syndicate / Florence Sztuder
Tel.: +33 1 42 98 41 44
E-mail: florence.sztuder@bnpparibas.com

Attn: Equity-linked Sales / Nicolas Van Zon
Tel.: +44 207 595 87 63
E-mail: nicolas.vanzon@uk.bnpparibas.com
 

Crédit Agricole Corporate and Investment Bank
12, Place des Etats-Unis
CS 70052
95547 Montrouge Cedex
France

Attn: Equity Syndicate
Tel: +33 (0)1 41 89 71 10
E-mail: equity_syndicate@ca-cib.com

Skandinaviska Enskilda Banken AB (publ).
Kungsträdgårdsgatan 8

106 40
Stockholm, Sweden

Attn: DCM Syndicate
Tel.: +44 7880 78 39 98
E-mail:  DCMSyndicate@seb.se

Swedbank AB (publ) (in cooperation with Kepler Cheuvreux S.A.)

c/o Swedbank AB (publ), Finnish Branch
Mannerheimintie 14B, 8th floor
P.O. Box 1107
FIN-00101 Helsinki

Attn: Christine Wahlsten
Tel.: +358 207469163
E-mail: Christine.wahlsten@swedbank.com
 

For further information, please contact:

Media: Reeta Kaukiainen, EVP – Communications and IR, tel. +358 50 522 0924

Investors: Marja Mäkinen, VP, Investor Relations, tel. +358 40 671 2999

Pia Aaltonen-Forsell, CFO, tel. +358 40 563 3712

Outokumpu Group

Outokumpu is the global leader in stainless steel. We aim to be the best value creator in stainless steel, through customer orientation and efficiency. The foundation of our business is our ability to tailor stainless steel into any form and for almost any purpose. Stainless steel is sustainable, durable and designed to last forever. Our customers use it to create civilization’s basic structures and its most famous landmarks as well as products for households and various industries. Outokumpu employs 10,000 professionals in more than 30 countries, with headquarters in Helsinki, Finland and shares listed in Nasdaq Helsinki. www.outokumpu.com

Important Information

No action has been taken by Outokumpu, the Managers or any of their respective affiliates that would permit an offering of the New Convertible Bonds or the Shares (both separately, a “Security” and together, the “Securities”) or possession or distribution of this stock exchange release or any offering or publicity material relating to the Offering or the Concurrent Accelerated Bookbuilding or any of the Securities (together, “Offer Materials”) in any jurisdiction where action for that purpose is required. Persons into whose possession this stock exchange release or any other Offer Materials comes are required by the Company and the Managers to inform themselves about, and to observe, any such restrictions.

This stock exchange release and any other Offer Materials are not intended as investment advice and under no circumstances are they to be used or considered as an offer to sell, or a solicitation of an offer to buy, any Security nor a recommendation to buy or sell any Security.

An investment in the Securities includes a significant degree of risk. Any decision to purchase any of the Securities should only be made on the basis of an independent review by a prospective investor of the Company’s publicly available information and the terms of the Securities. Each person receiving this stock exchange release or any other Offer Materials should consult his/her professional advisers to ascertain the suitability of the Securities as an investment. Neither the Managers nor any of their respective affiliates accept any liability arising from the use of, or make any representation as to the accuracy or completeness of, this stock exchange release or any other Offer Materials or the Company’s publicly available information. The information contained in this stock exchange release or any other Offer Materials is subject to change in its entirety without notice up to the date of issue of the New Convertible Bonds.

In connection with the Offering and the Concurrent Accelerated Bookbuilding, the Managers and any of their respective affiliates may take up a portion of the New Convertible Bonds in the Offering and/or may acquire Shares as a principal position and in that capacity may retain, purchase, sell or offer to sell for their own accounts such New Convertible Bonds, Shares and other securities of the Company or its group or related investments in connection with the Offering, the Concurrent Accelerated Bookbuilding or otherwise. 

The Managers are acting on behalf of the Company and no one else in connection with the Securities and will not be responsible to any other person for providing the protections afforded to clients of the Managers or for providing advice in relation to the Securities.

Potential investors who are in any doubt about the contents of this stock exchange release or any other Offer Materials should consult their stockbroker, bank manager, solicitor, accountant or other financial adviser. It should be remembered that the price of Securities and the income from them can go down as well as up.

THE SECURITIES MENTIONED IN THIS DOCUMENT HAVE NOT BEEN AND WILL NOT BE REGISTERED IN THE UNITED STATES UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, ABSENT REGISTRATION OR EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT. THERE WILL BE NO PUBLIC OFFER OF THE SECURITIES IN THE UNITED STATES OR IN ANY OTHER JURISDICTION. THE NEW CONVERTIBLE BONDS ARE BEING OFFERED AND SOLD OUTSIDE OF THE UNITED STATES IN RELIANCE ON REGULATION S UNDER THE SECURITIES ACT. THIS STOCK EXCHANGE RELEASE AND THE OFFERING WHEN MADE ARE ONLY ADDRESSED TO, AND DIRECTED IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA (THE “EEA”) AND THE UNITED KINGDOM (THE “UK”) AT PERSONS WHO ARE “QUALIFIED INVESTORS” WITHIN THE MEANING OF ARTICLE 2(e) OF THE PROSPECTUS REGULATION (“QUALIFIED INVESTORS”). FOR THESE PURPOSES, THE EXPRESSION "PROSPECTUS REGULATION" MEANS REGULATION (EU) 2017/1129, AS AMENDED.

PROHIBITION OF SALES TO EEA AND UK RETAIL INVESTORS - THE NEW CONVERTIBLE BONDS ARE NOT INTENDED TO BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO AND SHOULD NOT BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO ANY RETAIL INVESTOR IN THE EEA OR IN THE UK WITHIN THE MEANING OF REGULATION (EU) NO 1286/2014 (AS AMENDED OR SUPERSEDED, THE “PRIIPS REGULATION”). CONSEQUENTLY NO KEY INFORMATION DOCUMENT UNDER THE PRIIPS REGULATION HAS BEEN PREPARED AND THEREFORE OFFERING OR SELLING THE NEW CONVERTIBLE BONDS OR OTHERWISE MAKING THEM AVAILABLE TO ANY RETAIL INVESTOR IN THE EEA OR IN THE UK MAY BE UNLAWFUL UNDER THE PRIIPS REGULATION.

IN ADDITION, IN THE UNITED KINGDOM THIS STOCK EXCHANGE RELEASE IS BEING DISTRIBUTED ONLY TO, AND IS DIRECTED ONLY AT, QUALIFIED INVESTORS (I) WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE “ORDER”) AND QUALIFIED INVESTORS FALLING WITHIN ARTICLE 49(2)(A) TO (D) OF THE ORDER, AND (II) TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS “RELEVANT PERSONS”). THIS STOCK EXCHANGE RELEASE MUST NOT BE ACTED ON OR RELIED ON (I) IN THE UNITED KINGDOM, BY PERSONS WHO ARE NOT RELEVANT PERSONS, AND (II) IN ANY MEMBER STATE OF THE EEA, BY PERSONS WHO ARE NOT QUALIFIED INVESTORS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS STOCK EXCHANGE RELEASE RELATES IS AVAILABLE ONLY TO (A) RELEVANT PERSONS IN THE UNITED KINGDOM AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS IN THE UNITED KINGDOM AND (B) QUALIFIED INVESTORS IN MEMBER STATES OF THE EEA.

SOLELY FOR THE PURPOSES OF THE PRODUCT GOVERNANCE REQUIREMENTS CONTAINED WITHIN: (A) EU DIRECTIVE 2014/65/EU ON MARKETS IN FINANCIAL INSTRUMENTS, AS AMENDED (“MIFID II”); (B) ARTICLES 9 AND 10 OF COMMISSION DELEGATED DIRECTIVE (EU) 2017/593 SUPPLEMENTING MIFID II; AND (C) LOCAL IMPLEMENTING MEASURES (TOGETHER, THE “MIFID II PRODUCT GOVERNANCE REQUIREMENTS”), AND DISCLAIMING ALL AND ANY LIABILITY, WHETHER ARISING IN TORT, CONTRACT OR OTHERWISE, WHICH ANY “MANUFACTURER” (FOR THE PURPOSES OF THE MIFID II PRODUCT GOVERNANCE REQUIREMENTS) MAY OTHERWISE HAVE WITH RESPECT THERETO, THE NEW CONVERTIBLE BONDS HAVE BEEN SUBJECT TO A PRODUCT APPROVAL PROCESS, WHICH HAS DETERMINED THAT: (I) THE TARGET MARKET FOR THE NEW CONVERTIBLE BONDS IS ELIGIBLE COUNTERPARTIES AND PROFESSIONAL CLIENTS ONLY, EACH AS DEFINED IN MIFID II; AND (II) ALL CHANNELS FOR DISTRIBUTION OF THE NEW CONVERTIBLE BONDS TO ELIGIBLE COUNTERPARTIES AND PROFESSIONAL CLIENTS ARE APPROPRIATE. ANY PERSON SUBSEQUENTLY OFFERING, SELLING OR RECOMMENDING THE NEW CONVERTIBLE BONDS (A “DISTRIBUTOR”) SHOULD TAKE INTO CONSIDERATION THE MANUFACTURER’S TARGET MARKET ASSESSMENT; HOWEVER, A DISTRIBUTOR SUBJECT TO MIFID II IS RESPONSIBLE FOR UNDERTAKING ITS OWN TARGET MARKET ASSESSMENT IN RESPECT OF THE NEW CONVERTIBLE BONDS (BY EITHER ADOPTING OR REFINING THE MANUFACTURER‘S TARGET MARKET ASSESSMENT) AND DETERMINING APPROPRIATE DISTRIBUTION CHANNELS.

THE TARGET MARKET ASSESSMENT IS WITHOUT PREJUDICE TO THE REQUIREMENTS OF ANY CONTRACTUAL OR LEGAL SELLING RESTRICTIONS IN RELATION TO ANY OFFERING OF THE NEW CONVERTIBLE BONDS OR THE CONCURRENT ACCELERATED BOOKBUILDING.

FOR THE AVOIDANCE OF DOUBT, THE TARGET MARKET ASSESSMENT DOES NOT CONSTITUTE: (A) AN ASSESSMENT OF SUITABILITY OR APPROPRIATENESS FOR THE PURPOSES OF MIFID II; OR (B) A RECOMMENDATION TO ANY INVESTOR OR GROUP OF INVESTORS TO INVEST IN, OR PURCHASE, OR TAKE ANY OTHER ACTION WHATSOEVER WITH RESPECT TO THE NEW CONVERTIBLE BONDS.

THIS STOCK EXCHANGE RELEASE HAS NOT BEEN FILED WITH, OR REVIEWED BY, ANY NATIONAL OR LOCAL SECURITIES COMMISSION OR REGULATORY AUTHORITY OF THE UNITED STATES, THE UNITED KINGDOM, ITALY, FRANCE OR ANY OTHER JURISDICTION, NOR HAS ANY SUCH COMMISSION OR AUTHORITY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS STOCK EXCHANGE RELEASE. ANY REPRESENTATION TO THE CONTRARY MAY BE UNLAWFUL AND MAY BE A CRIMINAL OFFENCE.