Hexagon Composites — Major Shareholding Notification 2016

Feb 29, 2016

Hexagon Composites announces proposed private placement of new shares and strategic cooperation agreement with Mitsui & Co., Ltd.

Hexagon Composites announces proposed private placement of new shares and strategic cooperation agreement with Mitsui & Co., Ltd.

Hexagon Composites ASA ("Hexagon Composites" or the "Company") and Mitsui & Co.,

Ltd. ("Mitsui") have on 27 February 2016 entered into an investment agreement

(the "Investment Agreement") pursuant to which Mitsui on certain terms and

conditions undertakes to subscribe for 33,333,000 new ordinary shares (the "New

Shares") of the Company at a price of NOK 20.00 per new share (the "Subscription

Price"). The Subscription Price represents a premium of 3.0% over the volume

weighted average share price for the three month period ended on 26 February

2016, and a premium of 2.6% over the closing price of the shares on 26 February

At the same date, Hexagon Composites and Mitsui have entered into a five year

strategic co-operation agreement (the "Alliance Agreement"), pursuant to which

the parties, for as long as Mitsui remains a substantial shareholder in the

Company, among other things, agree to use their reasonable efforts to discuss

and promote the Company's market and commercial opportunities and development in

the best interests of the Company.

Concurrently with Hexagon Composites and Mitsui entering into the Investment

Agreement and the Alliance Agreement, Mitsui has separately entered into a share

purchase agreement (the "SPA") with Flakk Investment AS (a company controlled by

Knut Flakk, "Flakk Investment"), pursuant to which Mitsui shall purchase

8,333,321 Hexagon Composites shares from Flakk Investment at a price of NOK

20.00 per share. Immediately after, and subject to, completion of the Investment

Agreement and the SPA, Flakk Investment will hold 34,282,667 shares in the

Company (corresponding to 20.57% of the outstanding shares of the Company after

the issuance of the New Shares), and the total holding of Knut Flakk and his

close associates will be 36,095,717 shares (corresponding to 21.66% of the

outstanding shares of the Company after the issuance of the New Shares).

Immediately after, and subject to, completion of the Investment Agreement and

the SPA, Mitsui will hold 41,666,321 shares (corresponding to 25.01% of the

outstanding shares of the Company after the issuance of the New Shares).

Completion of the Investment Agreement is subject to, inter alia, approval by

the extraordinary general meeting of the Company (the "EGM") to issue the New

Shares, and the preparation and approval of a listing prospectus for the New

Shares. The EGM, where it will be proposed to deviate from the shareholders'

pre-emptive rights, and thereby issue the New Shares to Mitsui, is expected to

be held on or around 21 March 2016. The board of directors of the Company

considers that the approval of the transaction is in the Company's best

interests, due to, inter alia, the strategic opportunities inherent in a co-

operation with Mitsui and to the price at which the New Shares are proposed to

be issued. Completion of the Investment Agreement is further conditional upon

the information provided to Mitsui in advance of the agreements being complete,

and the absence of any material adverse change in the financial conditions,

business or results of operations of the Hexagon Composites group as a whole

prior to completion. In addition, completion of the Investment Agreement is

subject to completion of the SPA, and the completion of the SPA is subject to

completion of the Investment Agreement. Due to the conditions set out in the

Investment Agreement and SPA, there can be no guarantee that the transactions

described above will be completed.

«We are very pleased indeed to have Mitsui as a strategic partner and large

investor. Hexagon Composites has had commercial relations with Mitsui for

decades, and we fully appreciate the professionalism and integrity that

characterize their way of operating. As a major global corporation, Mitsui will

strongly support Hexagon Composites' strategic development of new markets and

segments. With its Japanese base, Mitsui has deep experience pertaining to

carbon fiber related industries. Japan has taken the lead in developing the

Hydrogen society, and we look forward to drawing on Mitsui's capabilities in

executing our Hydrogen strategy. With the capital to be contributed by Mitsui,

we will significantly strengthen our balance sheet and thus our capacity to

pursue organic as well as non-organic growth initiatives.», says Jon Erik

Engeset, President & CEO of Hexagon Composites.

"We, Mitsui, believe that the collaboration between Mitsui and Hexagon

Composites will meaningfully contribute towards creating additional value for

Hexagon Composites by enhancing the development of their existing and new

businesses. Furthermore, the collaboration will contribute towards the

development of two of Mitsui's seven Key Strategic Domains, which were publicly

announced in our New Medium-term Management Plan.  This deal is uniquely

positioned across Mitsui's "Mineral Resources" and "Mobility" domains and it

will help to develop and solidify these domains by increasing inter-domain

collaboration to generate synergies. Leveraging the opportunity with Hexagon

Composites and its lightweight products, we will pursue innovative solutions to

reduce CO2 emission. We plan to enhance the development of Hexagon Composites'

hydrogen strategy, aiming to pave our way to hydrogen societies near future"

says Isao Kuroda, General Manager of Performance Materials Division in Mitsui.

"As the main shareholder of Hexagon Composites ASA, the Flakk Group is very

pleased to welcome Mitsui as a new strategic investor. We are convinced that

Mitsui, with its comprehensive industrial background and global reach, will

contribute strongly to the future success of Hexagon Composites. The Flakk Group

will continue as a substantial, long term investor in Hexagon Composites and we

are looking forward to continuing to support the further development of the

company", says Knut Flakk, Chairman of Hexagon Composites and CEO of Flakk

Group.

DNB Markets, a part of DNB Bank ASA, acts as financial advisors to Hexagon

Composites in connection with transactions referred to above. Advokatfirmaet

Schjødt acts as legal advisors to Hexagon Composites.

About HEXAGON COMPOSITES ASA

Hexagon Composites ASA is a publicly listed company with its headquarters in

Aalesund, Norway. The Hexagon Composites group develops and produces composite

cylinders for the storage and transport of various gases under pressure.

About MITSUI & CO., LTD.

Mitsui is one of the most diversified and comprehensive trading, investment and

service enterprises in the world, with 141 offices in 66 countries as of Feb,

2016. Utilizing our global operating locations, network and information

resources, we are multilaterally pursuing business that ranges from product

sales, worldwide logistics and financing, through to the development of major

international infrastructure and other projects in the following fields: Iron &

Steel Products, Mineral & Metal Resources, Infrastructure Projects, Integrated

Transportation Systems, Chemicals, Energy, Food Resources, Food Products &

Services, Consumer Services, IT & Communication, Corporate Development Business.

Mitsui is actively taking on challenges for global business innovation around

the world. For more information, visit http://www.mitsui.com

For more information:

Jon Erik Engeset

Chief Executive Officer

Phone: +47 916 30 550 | jon.erik.engeset@hexagon.no

Investor Relations:

David Bandele

Chief Financial Officer

Telephone: +47 920 91 483 | david.bandele@hexagon.no

Press:

Solveig D Saether

Communication Manager

Phone: +47 906 34 977 | solveig.saether@hexagon.no

For more information about the company, please visit www.hexagon.no.

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

[HUG#1990008]