Telenor enters into a combination agreement with Song to strengthen Nordic reach
"By combining the resources of Telenor and Song, we aim to make Telenor Business Solutions a distinct leader of business communications solutions to enterprises in the Nordic market. This transaction will clearly strengthen Telenor's competitive position and meets nicely with the demand for more Nordic wide communications solutions," says Morten Lundal, CEO of Telenor Business Solutions.
The plan is agreed with Song's Board of Directors and includes a debt restructuring involving the exchange of substantially all outstanding bonds for a combination of cash and equity. The financial restructuring plan comprises the following:
- Song will acquire Telenor Business Solutions AB, which will be sold with a cash balance of SEK 550 million.
- In exchange for its contribution, Telenor will receive new Song shares representing 39.9% of the enlarged share capital of Song and a convertible bond, which, if converted in the next four years will enable Telenor to reach a majority holding in Song representing 84.5% of the share capital.
- In connection with the restructuring, Song will conduct up to a SEK 200 million rights offering to subscribe for new Song shares at the same subscription price at which Telenor is investing. If all shareholders subscribe to the offering, Telenor's fully diluted ownership after conversion of the bonds would amount to 73.2%.
- Song intends to complete a restructuring, conclude an Extraordinary General Meeting and close these transactions by the end of September 2002.
The share price for Telenor's investment and the rights offering will be determined after an agreement has been reached between Song and its bondholders on the number of shares to be issued to those bondholders.
The transaction is conditional upon the following, among other events:
Approval of a bond restructuring by Song's bondholders
Receipt of all necessary approvals by Song's shareholders at an Extraordinary General Meeting
Successful completion of an akkoord process in The Netherlands
- Appropriate regulatory approvals
The transaction is conditional upon completion of a restructuring of Song in which outstanding bonds of Song will be exchanged for a combination of cash and new equity.
Telenor has been granted a waiver by the Swedish Securities Council from the obligation to launch a mandatory tender offer. The waiver allows Telenor to acquire up to 73% of Song's outstanding shares and votes e.g. through conversion of the convertible bond.
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