Bong has reached a principle agreement with its lending banks


Press release 11 December 2015

On 10 December 2015, Bong AB (publ) (“Bong” or the “Company”) reached an agreement in principle with its main lending banks (the “Banks”) to facilitate a significant reduction of the Company’s indebtedness. The agreement is subject to the completion of a contemplated bond issue as well as a conversion of the Company’s outstanding convertible bonds to equity and the shareholders’ meeting of the Company approving, among other things, new issues of shares and subscription warrants. Bong is currently in the process of obtaining financing through the contemplated bond issue. A majority of the holders of the Company’s outstanding convertible bonds has undertaken to convert their convertible bonds to shares. The various steps are further described below.


Over the past two years, Bong has successfully carried out a restructuring plan, significantly reducing the number of production facilities from 37 to 23 and decreasing the number of full time employees from over 2,000 to 1,685 as per Q3 2015.

As a result of the measures taken in the restructuring of the Company, Bong’s annual cost base has been reduced by approximately SEK 223m and Bong generated an EBITDA of SEK 97m before restructuring costs for the twelve month period ending in September 2015. With the operational restructuring largely complete and significant costs having been eliminated, the Company is on track to achieve its stated target of positive earnings before tax in 2016.

In order to complete the turn-around for Bong it has been deemed necessary by the Board of Directors to significantly reduce and change the nature of the Company’s indebtedness since the current financing is not viable. Such actions would, if successfully completed, free up cash flow and provide Bong with increased operational and financial flexibility. The measures described in this press release outline the Company’s plan for refinancing and the aforementioned agreement signed with the Banks. It is the Board’s view that the necessary steps towards a sound capital structure are being taken through the outlined transactions. The details of the proposed transactions are outlined below.

Acquisition of the current bank facilities

Convertible bonds

Bond issue


Illustrative effect of proposed transactions

The various measures described above would increase equity by approximately SEK 500 million, of which nearly SEK 70 million is raised through the various issues of shares and subscription warrants, if fully subscribed for by all parties (assuming full subscription of shares through exercise of subscription warrants). The remaining equity increase is attributable to the debt reduction. The Company's interest-bearing debt would decrease by around SEK 430 million, whereby a reasonable balance between indebtedness and operating profit is achieved. An additional positive effect of the measures is that the borrowing costs are decreased as a result of the lower debt burden.

Financial advisors

AGB Sundal Collier AB is acting as financial advisor to the Company in conjunction with the proposed transactions.

About Bong

Bong is a leading provider of specialised packaging and envelope products in Europe, offering solutions for distribution and packaging of information, advertising materials and lightweight goods. Important growth areas in the Group are packaging within retail and e-commerce and the envelope market within Eastern Europe. The Group has annual sales of approximately SEK 2.3 billion and about 1,685 employees in 16 countries. Bong has strong market positions in the majority of key markets in Europe, and the Group sees interesting possibilities for continued expansion and development. Bong is a public limited company whose stock is quoted on the Nasdaq Stockholm (Small Cap).

Bong AB (publ) discloses the information in this press release pursuant to the Securities Markets Act. The information was provided for public release on 11 December, 2015 at 08:10 am CET.

Important information

This press release does not constitute an offer of any securities of Bong. Neither the directed share issues nor any other transaction described in this press release is directed to shareholders or other investors domiciled in the United States, Australia, Hong Kong, Japan, Italy, Canada, Singapore, South Africa or New Zealand, or in any other country where any such transaction would require additional prospectuses, registration or other measures other than those pursuant to Swedish law or would conflict with regulations in such country. No shares, interim shares, subscription rights, convertibles or other securities issued by Bong have been or will be registered in accordance with the United States Securities Act of 1933, or in accordance with any securities legislation in any state of the United States or any province in Canada. Accordingly, no new shares, interim shares or other securities issued by Bong may be transferred or offered for sale in the United States or Canada, other than in such exceptional cases that do not require registration. The transactions described in this press release are directed only at (i) persons who are outside the United Kingdom; (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended); or (iii) persons to whom they can otherwise lawfully be directed at.

For further information contact Stéphane Hamelin, CEO, Bong AB.
Phone (switchboard) +46 44-20 70 00