EAM Solar

Legal Proceedings Report • Jun 26, 2017

EAM Solar ASA : Secures financing to expand legal processes

EAM Solar ASA : Secures financing to expand legal processes

26 June 2017

EAM Solar ASA "EAM" or "the Company" has entered into two separate funding

schemes in order to increase the litigation efforts against Enovos, Avelar and

associated companies.

The funding schemes are a litigation funding agreement and an equity rights

issue, fully underwritten by the Company's largest shareholders. The two

initiatives will significantly strengthen the Company's financial "litigation

war chest" and enable EAM to expand its ongoing legal processes in Italy,

Luxembourg, Switzerland and other relevant jurisdictions in the foreseeable

future.

The litigation funding agreement with Therium Litigation Funding IC and the

equity rights' issue will in the outset contribute with more than EUR 5 million

to cover future legal costs based on the current budgets for legal costs in the

period 2017 through 2021. This funding comes in addition to the free cash flow

from ordinary operations, significantly enhancing the legal strength of EAM

going forward.

The dialogue with Therium was initiated in November 2016, and following a

comprehensive due diligence conducted by Therium in close collaboration with

EAM's management and EAM's legal counsels in Italy and Luxembourg, Therium

decided to participate in and invest in the EAM litigation efforts in June.

The key financial metrics for the litigation funding agreement and the equity

rights issue is that Therium in the case of a claim award to EAM Solar ASA will

receive in the range 5 to 10% of the anticipated claim award, and the dilution

of non-participating shareholders in the equity rights issue will be

approximately 20% (excluding any revenue from sale of subscription rights).

"We have during the past year made significant progress in the ongoing legal

processes. With the proposed initiatives to put in place further financial

resources, we strengthen our capabilities to seek justice and expand our pan-

European efforts against the companies and individuals that were involved and

responsible for the P31 fraud against EAM. The fact that Therium, as a

specialist Litigation Fund, after a comprehensive due diligence decides to

invest in our litigation efforts, further confirms the strength of our case

against the responsible for the P31 fraud," says Viktor E. Jakobsen, CEO of EAM

in a comment.

Therium is one of the most established global litigation financing firms,

founded in London and Jersey in 2009, with a presence in London, New York,

Jersey, Spain, Italy, Scandinavia and Germany, and a market-leading track record

of generating superior returns for its investors. In April 2015, Therium secured

$300 million to invest in commercial litigation financing, the largest ever

single investment in the litigation-funding sector, globally. Therium Nordic AS

has been active since the spring of 2016 and has been well received by the legal

communities and leading law firms in Oslo, Stockholm and Copenhagen. Therium

Nordic AS has so far funded a number of meritorious claims for Nordic claimants.

"Therium has worked with EAM and their experienced team of international legal

advisers for several months, with the intention to make a major investment in

this extraordinary case. We are very pleased, and proud, through our investment

decision to contribute significantly to EAM seeking justice in this complex, but

strong case", says Henrik A. Jensen, chairman of the board in Therium Nordic AS.

The litigation funding transactions follows a ruling where the Criminal Court of

Milan ordered the conservative seizure (see OSE release 8 June 2017) in favour

of EAM Solar ASA and EAM Solar Italy Holding S.r.l., on all assets belonging to

Marco Giorgi and Igor Akhmerov (previous directors of Aveleos SA and associated

companies), up to the total amount of more than Euro 33 million. The Court's

decision was made in order to secure a possible compensation of part of the cash

outlay made by EAM companies in July 2014 in conjunction with the P31 fraud also

involving Aveleos SA, Avelar Energy Ltd and Enovos Luxembourg SA. The Court

furthermore decided not to grant a conservative seizure against Enovos

Luxembourg SA and Avelar Energy Ltd since the Court deemed these companies to

have sufficient financial resources to meet any future payments of damages

claims to EAM.

The amount identified by the court in this conservative seizure ruling is not to

be interpreted as a limitation to the final damages claims that may be awarded

EAM Solar ASA in the criminal proceedings in Milan and elsewhere.

The proposed litigation funding comprises a maximum amount of approximately EUR

2.3 million divided into three equal tranches. The first tranche of EUR 776,865

has been committed, and Therium may provide two additional tranches in the same

amount in the future at their own discretion if the Company needs further funds

to cover legal costs. The funding is non-recourse and does not constitute a

debt, however, Therium will upon a successful claim award receive four times the

invested amount on any committed tranches.

In connection with the proposed Rights Issue, the Company has entered into an

underwriting agreement with the Company's main shareholders of NOK 30 million

who upon and subject to certain conditions underwrite the subscription of all

the shares to be offered in the forthcoming Rights Issue.

The investment bank Carnegie and the law firm Wiersholm has acted as the

Company's financial and legal advisors.

"We are grateful for the continued backing and support from our shareholders and

we remain dedicated to rectify the damages inflicted on EAM and our shareholders

following the fraudulent actions by Aveleos SA, Avelar Energy Ltd and Enovos

Luxembourg SA and their representatives", says Viktor E. Jakobsen in a comment.

For further details about the transactions see separate OSE releases. The

summons for an Extraordinary General Meeting will be issued at a later date.

For information, please contact:

Viktor E Jakobsen, Executive Director, phone +47 9161 1006, viktor@eam.no

About EAM Solar: EAM Solar is a utility company that acquires and operates solar

power plants. The Company currently owns solar PV power plants in Italy. The

plants are operating under long-term sales contracts.

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.