CITYCON OYJ INSIDE INFORMATION 28 November 2023 at 22:00 hrs
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, THE HONG KONG SPECIAL ADMINISTRATIVE REGION OF THE PEOPLE’S REPUBLIC OF CHINA, JAPAN, NEW ZEALAND, SINGAPORE, SOUTH AFRICA OR THE UNITED STATES, OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL.
The Board of Directors of Citycon Oyj (“Citycon” or the “Company”) has decided in its meeting today, 28 November 2023, by virtue of the authorization granted by the Annual General Meeting of the Company on 21 March 2023, to issue up to 2,774,398 new shares in the Company (the “Shares”) to a institutional hybrid bond holder in the Company (the “Investor”) in deviation of the pre-emptive subscription rights of the shareholders (the “Share Issue”) in exchange for the Company repurchasing certain of its outstanding subordinated fixed to reset rate 5.25 year non-call undated green capital securities, issued on 22 November 2019 (ISIN XS2079413527, the “2024 Hybrid Bonds”) from the Investor in an aggregate principal amount of EUR 17.5 million (the “Bond Repurchase”, and together with the Share Issue, the “Transaction”). Pursuant to the Transaction, the subscription price for the Shares payable by the Investors to the Company is set off against the repurchase price for the 2024 Hybrid Bonds payable by the Company to the Investor.
The Board of Directors has approved the terms and conditions of the Share Issue and the subscription made in accordance with the terms and conditions of the Share Issue. A total of 2,774,398 Shares were subscribed for in the Share Issue. The subscription price was EUR 5.30 per Share, and the aggregate subscription price for all Shares was approximately EUR 14.7 million. The closing price of the Company’s share in Nasdaq Helsinki on 28 November 2023 was EUR 5.24. The subscription price will be credited in full to the Company’s reserve for invested unrestricted equity.
The Company will repurchase the 2024 Hybrid Bonds for an approximate aggregate price of EUR 14.7 million. The repurchase price equals to approximately 84.0 per cent of the principal amount of each of 2024 Hybrid Bonds, excluding all accrued and unpaid interest on such principal amount.
The main purpose of the Transaction is to strengthen the Company’s balance sheet and improve its capital structure in the current market environment, while doing so in a rapid and cost-effective manner that, in the assessment of the Company, would otherwise not be available in the current market conditions. Additionally, the capital structure and balance sheet strengthening will also allow the Company to maintain its investment grade credit rating for the foreseeable future. There are, therefore, weighty financial reasons for the Company to deviate from shareholders’ pre-emptive subscription rights.
F. Scott Ball, the CEO and Vice Chairman of the Board of Directors of Citycon comments:
“This transaction highlights our commitment to maintain our investment grade balance sheet. We are repurchasing some of our hybrid bonds at a discount compared to the nominal value in exchange for equity at the current market value. Through this strategic action, we continue our efforts to mitigate the impact of higher current market interest rates, while improving our overall balance sheet via additional equity.”
After the subscribed Shares have been registered in the Finnish Trade Register, the number of shares in the Company will be 170,783,338. The subscribed Shares correspond to approximately 1.65 per cent of all of Citycon’s shares and votes immediately prior to the Share Issue and to approximately 1.62 per cent after the Share Issue.
The Shares will be registered in the Finnish Trade Register on or about 30 November 2023, and trading in the Shares together with the existing shares is expected to commence on Nasdaq Helsinki Ltd on or about 1 December 2023.
Further information:
Sakari Järvelä
Vice President, Corporate Finance and Investor Relations
Tel. +358 50 387 8180
sakari.jarvela@citycon.com
Citycon is a leading owner, manager and developer of mixed-use real estate featuring modern, necessity-based retail with residential, office and municipal service spaces that enhance the communities in which they operate. Citycon is committed to sustainable property management in the Nordic region with assets that total approximately EUR 4.2 billion. Our centres are located in urban hubs in the heart of vibrant communities with direct connections to public transport and anchored by grocery, healthcare and other services that cater to the everyday needs of customers.
Citycon has investment-grade credit rating from Standard & Poor's (BBB-). Citycon’s shares are listed on Nasdaq Helsinki Ltd.
www.citycon.com
Important notice
Forward-Looking Statements
This release contains forward-looking statements, including, without limitation, statements regarding Citycon’s strategy, business plans and focus. The words “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “target” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Any forward-looking statements in this release are based on management’s current expectations and beliefs and are subject to a number of risks, uncertainties and important factors that may cause actual events or results to differ materially from those expressed or implied by any forward-looking statements contained in this release, including, without limitation, any related to Citycon’s business, operations, supply chain, strategy, goals and anticipated timelines and competition from other companies. Citycon cautions you not to place undue reliance on any forward-looking statements, which speak only as of the date they are made. Citycon disclaims any obligation to publicly update or revise any such statements to reflect any change in expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements. Any forward-looking statements contained in this release represent Citycon’s views only as of the date hereof and should not be relied upon as representing its views as of any subsequent date.
Important notice
The information contained herein shall not constitute an offer to sell or the solicitation of any offer to buy or subscribe for, nor shall there be any sale of the securities referred to herein in any jurisdiction.
The information contained herein may not be announced, published, copied, reproduced or distributed, directly or indirectly, in whole or in part, within or into the United States, Australia, Canada, Hong Kong, South Africa, Singapore, New Zealand or Japan or in any other jurisdiction in which such announcement, publication or distribution would not comply with applicable laws and regulations or where such actions are subject to legal restrictions or would require additional registration or other measures than what is required under Finnish law. This press release does not constitute an offer of securities for sale in the United States, nor may the securities be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements under the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder. There is no intention to register any portion of the offering in the United States or to conduct a public offering of the securities in the United States.