Nordic Financials ASA — M&A Activity 2019

May 9, 2019

Agreement of quota sale – detailed stock exchange announcement

Agreement of quota sale – detailed stock exchange announcement

9 May 2019 – Aega ASA (the "Company" or "Aega") has agreed (the “transaction”) to sell all its solar power plants to Italia T1 Roncolo S.r.l, a subsidiary of Mareccio Energia (“Mareccio”). The signing of the agreement is formally pending the approval of the board of directors of the seller and the investment committee of the buyer.

The agreement involves a takeover by Mareccio of all of Aega’s Italian subsidiary companies and their respective solar power plants. A total of eight solar power plants in Italy, with a combined production capacity of 8 MW, are part of the transaction.

The purchase price is EUR 22.6 million on an enterprise value basis, corresponding to an equity value of EUR 10.6 million, subject to certain adjustments done before and after closing. The equity value of EUR 10.6 million is the value equivalent of approximately NOK 2.10 per share in Aega.

“It is a well known fact that the Aega share has traded around NOK 1 per share for the past 18 months and that Aega currently has limited financial capacity to acquire new solar power plants. Hence, the board and management consider this transaction to be a good deal for our shareholders, enabling us to realise the underlying values of the company significantly quicker than we would have been able to do organically,” says Markus Enge, CEO of Aega.

If the transaction is completed, Aega will book an accounting gain of approximately EUR 2.5-3.0 million, depending on the exact timing of closing and final purchase price calculations.

“The transaction confirms Aega’s ability to identify, operate and optimise solar parks. We view this deal as the end of the first chapter in Aega’s history. We have already started identifying ways to utilise the proceeds and our infrastructure to accelerate new investment in Italian solar parks, with the objective of generating further value for our shareholders," says Markus Enge.

Proposed extraordinary dividend payment

In the second quarter 2018 report, Aega’s board of directors announced two new key objectives for the Company:

1. Be in a position to reinstate dividends before the annual general meeting in 2019

2. Use the structure already in place and try to grow opportunities

“With the sale of our eight solar parks in Italy we are delivering on the second objective. Should the transaction with Mareccio be completed as planned, the board of directors will propose to the shareholders that the board is authorized to distribute an extraordinary dividend of up to NOK 0.20 per share. The board remains committed to delivering on our first objective of reinstating dividends.” says Halldor Christen Tjoflaat, chairman of the board in Aega.

Parties to the transactions, transaction structure

The transaction is structured as a quota purchase agreement between the Company and its subsidiary Aega Yieldco AS as seller and a subsidiary of Mareccio, Italia T1 Roncolo S.r.l, as buyer. Aega will transfer its quota in all its Italian subsidiaries.

Final closing is pending the approval of change of control by the financial institutions providing the senior debt, approval of the board of directors of the seller and the investment committee of the buyer.

Consideration and settlement model

The purchase price is EUR 10.6 million, subject to a leakage adjustment from 30 June 2018 and an interest calculation from 1 April 2019 until closing. Of the purchase price, EUR 150,000 will be held back in general escrow and EUR 400,000 is locked in an escrow specifically connected to the outcome of a specific tax litigation (see note 10 in Aega’s 4Q 2018 financial report for details).

Based on 2Q 2018 financials that were the basis for the price calculation, the transaction value is equivalent to approximately NOK 2.10 per share. However, the final payment will be somewhat lower due to leakage adjustments, but this will be partly offset by interest payments from the buyer to Aega for the period from 1 April 2019 until closing of the agreement.

The Company has given warranties which are in line with market practice for similar transactions.

Timetable

The transaction is subject to approval from the financing institutions of Aega. The approval process will commence immediately. All approvals are expected within the third quarter of 2019.

The business to which the transaction applies

The quota purchase agreement includes the sale of the following of Aega’s subsidiary companies, containing one solar park each: Photo-Volt One Srl, DT Srl, JER-12 Srl, Piano Mulino Srl, Casale Srl and Solar Park Luino Srl, as well as Collesanto Srl holding two parks. The entities in question do not have any employees.

Please see attached document for certain key consolidated financial figures for the entities that are part of the transaction.

Significance of the transaction for Aega

If completed, Aega will no longer own any solar plants. However, Aega will retain its executive management, employees, board of directors and Norwegian company structure. The Company has already started due diligence on several solar parks in Italy with an objective of acquiring them soon after closing of the transaction. Aega will continue to search for smaller solar power plants in the range between 1 and 5 MWp and consolidate it into a larger portfolio. The board of directors has concluded that the strategy of the Company stays firm and that this transaction demonstrates the value of the infrastructure and experience of the team.

Agreements to the benefit of board members or management in Aega ASA

Halldor Tjoflaat, chairman of the board of directors; Nils Petter Skaset, board member; and Steinar Fretheim, member of the nomination committee, will, respectively, be entitled to a compensation of maximum NOK 300,000 upon closing of the transaction as remuneration for extraordinary workload in connection with the transaction. As a result, the Company’s expenses to external legal and financial advisors have been kept to a minimum.

Markus Enge, CEO of Aega, will be entitled to a bonus of maximum NOK 250,000 upon closing of the transaction.

Other

Aega has been assisted by Antonella Alfonsi and Emanuele Bottazzi from the legal team in Deloitte Italy and the financial advisors in Studio Torresi. Mads Bakjord in Swedbank has acted as financial advisor to the buyer.

ENDS

For further information, please contact:

Markus Enge, CEO of Aega ASA, tel: +47 225 60 600, email: mhe@aega.no