Borgestad ASA — Capital/Financing Update 2023

Nov 7, 2023

Borgestad ASA: Successful placement of private placement

Borgestad ASA: Successful placement of private placement

NOT FOR DISTRIBUTION, PUBLICATION OR RELEASE, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, JAPAN, HONG KONG, SOUTH AFRICA OR THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION, PUBLICATION OR RELEASE WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED HEREIN.

Borgestad, 7 November 2023: Reference is made to the stock exchange announcement published by Borgestad ASA (the "Company") on 6 November 2023 regarding a contemplated private placement of new shares (the "Private Placement").

Private placement and subsequent offering

The Company is pleased to announce that gross proceeds of NOK 250 million have been placed through the Private Placement. A total of 1,000,000,000 new shares (the "Offer Shares") will be issued in the Private Placement at a subscription price per Offer Share of NOK 0.25.

The Private Placement was placed as an accelerated bookbuilding process managed by Arctic Securities AS and SpareBank 1 Markets AS (the "Managers").

The Private Placement attracted significant interest from both existing shareholders and new investors.

The following existing shareholders and primary insiders have received conditional allocation as follows:

• Kontrari AS (represented on the board by Jan Erik Sivertsen): 300,000,000 shares

• SES AS (represented on the board by Helene Steen): 188,295,725 shares

• Dione AS and Ploot Invest AS (represented on the board by Jacob Møller): 38,078,783 shares (Dione AS) and 4,194,600 shares (Ploot Invest AS), in total 42,273,383 shares

• CEO Pål Feen Larsen: 4,800,000 shares

• Jawendel AS (represented on the board by Wenche Kjølås): 4,000,000 shares

• Frode Martinussen, Group CEO of Höganäs Borgestad: 1,000,000 shares

The net proceeds from the Private Placement will be used (i) to repay the outstanding debt under the Company's bond loan (BOR04) with a principal amount of approximately NOK 100 million (the "Bond Loan"), by carrying out a full redemption of the issued bonds at a price equal to 100% of the nominal value, (ii) to repay EUR 10 million (approximately NOK 120 million) of the group's investment loan with Pekao S.A. Bank with a principal amount of approximately EUR 40.4 million (the "Agora Bytom Loan"), in connection with a contemplated refinancing of such loan, and (iii) for general corporate purposes.

The completion of the Private Placement is subject to (i) the corporate resolutions required to carry out the Private Placement having been validly made, including approval by the Company's extraordinary general meeting expected to be held on or around 28 November 2023 (the "EGM"), (ii) the EGM's approval of a share capital reduction where the nominal value of the Company's shares is reduced from NOK 1.00 to NOK 0.25 (the "Share Capital Reduction"), (iii) registration of the Share Capital Reduction and the share capital increase pertaining to the Private Placement in the Norwegian Register of Business Enterprises, (iv) the issuance of the Offer Shares in the VPS, (v) the EGM's approval of the Subsequent Offering (as defined below), (vi) initial (non-binding) approval from the Municipal Council of Bjuv for the sale-leaseback transaction announced through the Company's stock exchange announcement on 27 October 2023, and (vii) the agreement between the Company and the Managers regarding pre-payment of the proceeds from the Private Placement not having been terminated (collectively, the "Conditions").

The Private Placement will not be completed if the Conditions are not fulfilled by 15 December 2023.

Investors who are allocated Offer Shares in the Private Placement undertake to vote in favour of the Share Capital Reduction, the Private Placement (including the board of directors' proposed allocation) and the Subsequent Offering at the EGM.

Conditional allocation of the Offer Shares has been determined by the board of directors, in consultation with the Managers, following expiry of the bookbuilding period for the Private Placement.

Information about conditional allocation will be issued by the Managers to the subscribers who have received conditional allocation on or around 7 November 2023. Final allocation will be resolved by the EGM, and information on final allocation will be issued by the Managers to the subscribers who have received conditional allocation on or around 29 November 2023, subject to the fulfilment of the Conditions. The Offer Shares allocated in the Private Placement are expected to be delivered on a delivery versus payment ("DvP") basis on or around 30 November 2023, provided that the Conditions, including the registration of the Offer Shares in the Norwegian Register of Business Enterprises, are fulfilled. The DvP settlement will be facilitated through a prefunding agreement entered into between the Company and the Managers. The Offer Shares cannot be traded on the Oslo Stock Exchange until the share capital increase pertaining to the Private Placement has been registered in the Norwegian Register of Business Enterprises and the Prospectus (as defined below) has been published.

The Company will publish a prospectus for the listing of the Offer Shares, as well as the offer and listing of new shares in connection with the Subsequent Offering (the "Prospectus"), on or around 4 December 2023. If the Offer Shares are issued before the Prospectus is published, they will be delivered to investors under a separate ISIN and will only be tradable on the Oslo Stock Exchange after the Prospectus has been published.

The board of directors has carefully considered the Private Placement in light of the equal treatment obligations under the Norwegian Public Limited Companies Act, the Norwegian Securities Trading Act, the Oslo Stock Exchange's Rule Book II and the Oslo Stock Exchange's guidelines for equal treatment, and is of the opinion that the proposed Private Placement is in compliance with these requirements.

The Bond Loan matures on 8 January 2024, and the board of directors considers it necessary to complete a capital raise as swiftly as possible to ensure that the Company can repay the Bond Loan at or prior to maturity. The Company's financial position will be very serious if such repayment cannot be made.

It is further noted that the Agora Bytom Loan matures on 30 June 2024, but that the Company has entered into a term sheet with Pekao S.A. Bank, which, among other things, entails that the maturity date for the loan will be postponed until 31 December 2028, provided that the Company repays approximately NOK 120 million of the loan, that a final amendment agreement is entered into, and that certain additional conditions for completion are fulfilled. Therefore, it is also desirable to carry out the Private Placement to secure capital for such repayment and thereby an extension of the Agora Bytom Loan.

The need for prompt clarification of whether it will be possible to raise sufficient equity to repay the Bond Loan at maturity and carry out the partial repayment of the Agora Bytom Loan makes it, in the board of directors' opinion, necessary to conduct the capital raise as a private placement rather than a rights issue. A rights issue would take substantially longer to complete, and this could significantly impair the Company's options in the period up to the maturity of the Bond Loan. It was also emphasised that the Private Placement was based on a public accelerated bookbuilding process and is subject to approval from the shareholders at the EGM.

The board of directors will propose to the EGM that a Subsequent Offering of up to 250,000,000 new shares in the Company be carried out, directed at shareholders in the Company as of 6 November 2023 (as registered in the VPS on 8 November 2023) who (i) were not contacted in the wall crossing phase of the Private Placement, (ii) were not allocated Offer Shares in the Private Placement, (iii) are not domiciled in a jurisdiction where such an offer would be unlawful or, for jurisdictions other than Norway, require any prospectus, filing, registration or similar action (the "Subsequent Offering"). Such shareholders will be granted non-transferable subscription rights to subscribe for and be allocated new shares in the Subsequent Offering. The subscription price in the Subsequent Offering will be equal to the subscription price in the Private Placement. Oversubscription will be permitted, but subscription without subscription rights will not be permitted. The net proceeds from the Subsequent Offering will be used for general corporate purposes.

The completion of the Subsequent Offering will be subject to the approval of the EGM, as well as the completion of the Private Placement following the fulfilment of all the Conditions. Therefore, the Subsequent Offering will also be conditional upon the completion of the Share Capital Reduction and the initial approval of the sale-leaseback transaction by the Municipal Council of Bjuv. The application period for the Subsequent Offering is expected to commence shortly after the publication of the Prospectus. The Company will issue a separate stock exchange announcement with further details on the Subsequent Offering.

Against this background, and based on an assessment of the current conditions in the stock markets, the Company's board of directors has considered the Private Placement to be in the common interest of the Company and its shareholders. Due to the structure of the Private Placement, the shareholders' preferential rights will be waived.

Proposal for share capital reductions and share capital increases

The Company currently holds 8,010 treasury shares that the board of directors considers it desirable and appropriate to cancel through a share capital reduction in accordance with the Norwegian Public Limited Companies Act Section 12-1(1) item 2. The board of directors will propose that this share capital reduction be carried out prior to the Share Capital Reduction mentioned above and that it is made conditional upon the simultaneous registration of the share capital increase pertaining to the Private Placement, so that creditor notification not will be required.

Based on the above, the Company's board of directors has decided to propose to the EGM that:

(i) the Company's share capital be reduced by NOK 8,010 through deletion of the Company's treasury shares;

(ii) the Company's share capital be reduced by NOK 114,362,130.75 through reduction of the nominal value of each share by NOK 0.75, from NOK 1.00 to NOK 0.25;

(iii) the Company's share capital be increased by NOK 250,000,000 by issuing 1,000,000,000 new shares, each with a nominal value of NOK 0.25, at a subscription price of NOK 0.25 in connection with the Private Placement; and

(iv) the Company's share capital be increased by a minimum of NOK 0.25 and a maximum of NOK 62,500,000, by issuing minimum 1 share and maximum 250,000,000 shares, each with a nominal value of NOK 0.25, at a subscription price of NOK 0.25.

Advokatfirmaet Thommessen AS is acting as legal advisor to the Company.

For more information, please contact

Pål Feen Larsen, CEO Borgestad ASA, +47 488 45 333

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This information is considered to be inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to section 5-12 the Norwegian Securities Trading Act.

This stock exchange announcement was published by Pål Feen Larsen, CEO in Borgestad ASA on 7 November 2023 at 01:35 CET on behalf of the Company.

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About Borgestad | www.borgestad.no

Borgestad ASA (OSE:BOR) is an investment company focused on real estate and industry. The key investments include Agora Bytom shopping center and the leading refractory manufacturer Höganäs Borgestad.

About Höganäs Borgestad | www.hoganasborgestad.com

Höganäs Borgestad develops, manufactures and delivers refractory products, installations and turnkey solutions that enhance the productivity and competitiveness of industrial customers. The aim is to contribute to the customers' profitability by providing high-value refractory solutions to their challenges. Today, the company is a leading supplier in the refractory market of the Nordic countries and has a global presence in a number of selected application areas.

IMPORTANT NOTICE:

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy, fairness or completeness. Neither Arctic Securities AS nor Sparebank 1 Markets AS (the "Managers") or any of their affiliates or any of their respective directors, officers, employees, advisors or agents accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available, or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith. This announcement has been prepared by and is the sole responsibility of the Borgestad ASA (the "Company").

Neither this announcement nor the information contained herein is for publication, distribution or release, in whole or in part, directly or indirectly, in or into or from Australia, Canada, Japan, Hong Kong, South Africa or the United States (including its territories and possessions, any State of the United States and the District of Columbia) or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. The publication, distribution or release of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement is not an offer for sale of securities in the United States. The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act, and may not be offered or sold in the United States absent registration with the U.S. Securities and Exchange Commission or an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in accordance with applicable U.S. state securities laws. The Company does not intend to register any securities referred to herein in the United States or to conduct a public offering of securities in the United States.

This announcement is an advertisement and is not a prospectus for the purposes of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 (the "EU Prospectus Regulation") (together with any applicable implementing measures in any Member State). All of the securities referred to in this announcement has been offered by means of a set of subscription materials provided to potential investors, except for the subsequent repair offering which will be made on the basis of a listing and offering prospectus. Investors should not subscribe for any securities referred to in this announcement except on the basis of information contained in the aforementioned subscription materials or for the subsequent repair offering, the prospectus.

In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the EU Prospectus Regulation, i.e. only to investors who can receive the offer without an approved prospectus in such EEA Member State.

This communication is only being distributed to and is only directed at persons in the United Kingdom that are "qualified investors" within the meaning of the EU Prospectus Regulation as it forms part of English law by virtue of the European Union (Withdrawal) Act 2018 and that are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or (ii) high net worth entities, and other persons to whom this announcement may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.

This announcement is made by, and is the responsibility of, the Company. The Managers and their affiliates are acting exclusively for the Company and no-one else in connection with the transactions described in this announcement. They will not regard any other person as their respective clients in relation to the transactions described in this announcement and will not be responsible to anyone other than the Company, for providing the protections afforded to their respective clients, nor for providing advice in relation to the transactions described in this announcement, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

In connection with the transaction described in this announcement, the Managers and any of their affiliates, acting as investors for their own accounts, may subscribe for or purchase securities and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such securities of the Company or related investments in connection with the transactions described in this announcement or otherwise. Accordingly, references in any subscription materials to the securities being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, the Managers and any of their affiliates acting as investors for their own accounts. The Managers does not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "aim", "expect", "anticipate", "intend", "estimate", "will", "may", "continue", "should" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies, and other important factors which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies, and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. Forward-looking statements speak only as of the date they are made and cannot be relied upon as a guide to future performance. The Company, the Managers and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future developments or otherwise. The information, opinions and forward-looking statements contained in this announcement speak only as at its date and are subject to change without notice.