Stock Exchange Release|31.1.2022

Enersense’s Board decided on a directed share issue of 2,598,331 new Enersense shares in relation to the Megatuuli transaction – the transaction is estimated to be completed on 1 February 2022

Enersense International Plc 
Stock Exchange Release, 31 January 2022 at 11:50 p.m.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND, SINGAPORE, SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE THE RELEASE, PUBLICATION OR DISTRIBUTION WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION. FOR FURTHER INFORMATION, PLEASE SEE THE “IMPORTANT NOTICE” BELOW. 

Enersense International Plc (“Enersense”), a provider of zero-emission energy solutions, announced on 20 December 2021 that it has signed an agreement on the acquisition of Megatuuli Oy (“Megatuuli”), an onshore wind farm developer. Enersense estimated that the transaction (“Share Transaction”) will be completed during January 2022.  

Enersense’s Board of Directors has today decided on a directed share issue of a total of 2,598,331 new Enersense shares to the sellers of Megatuuli in relation to the Share Transaction. The share issue is conditional on the completion of the Share Transaction. The completion of the Share Transaction is estimated to be take place on 1 February 2022. 

Jussi Holopainen, CEO, Enersense International Plc:   

“Megatuuli has, together with its partners, wind power plant projects in progress or in the feasibility study phase, with a total capacity of around 3,000 MW. It is great to have such a significant operator to support and complement Enersense Group’s strong selection of wind power services.  Enersense will continue to offer its partners wind power design and construction services but after the value chain expansion, we will also begin to develop wind farms in cooperation with Megatuuli’s partners. In the future, we will also seek to independently construct wind farms as well serve as their owners and produce zero-emission energy.”   

As announced by Enersense earlier, it was agreed that the Share Transaction is conditional on, among other things, the Extraordinary General Meeting of Enersense, convened to be held on 11 January 2022, deciding to change the Articles of Association of Enersense and authorising Enersense’s Board of Directors to decide on a directed share issue and security arrangements concerning the Share Transaction; amending the Articles of Association of Megatuuli to create a new series of non-voting shares; as well as the current shareholders of Megatuuli and Enersense negotiating a shareholder agreement concerning Megatuuli. On 11 January 2022, Enersense announced the decisions of the General Meeting. In addition, the conditions concerning Megatuuli’s Articles of Association and negotiating a shareholder agreement have also been fulfilled. 

It was also agreed that the Share Transaction is conditional on, among other things, certain Megatuuli’s project development partners waiving the change of control terms included in the agreements between Megatuuli and these parties in connection with the Share Transaction, as well as on renegotiating the duration and certain terms and conditions of the cooperation agreement with Megatuuli’s key project development partner. On 10 January 2022, Enersense announced that Megatuuli had concluded a preliminary agreement with its said development partner, containing the mutual understanding of parties on the key terms of the cooperation agreement to be renegotiated, with the aim of promoting the conclusion of a final amended cooperation agreement and thus, with the view of fulfilling the preconditions of the Share Transaction to this extent. Enersense also announced that it has, on behalf of Megatuuli, provided a security of EUR 5 million to guarantee the conclusion of a final amended cooperation agreement in accordance with the preliminary agreement, and that the security will expire if the Share Transaction has not been completed by 13 February 2022.  

Even though the negotiations on the above final cooperation agreement are still ongoing based on the concluded preliminary agreement, the parties to the Share Transaction are willing to complete the Share Transaction on the basis of the above preliminary agreement. The other preconditions have been fulfilled, which fulfilment will also be confirmed at the completion and based on a careful assessment by Enersense’s Board, it is in the company's best interest to complete the Transaction despite the fact that the precondition concerning the renegotiation of the cooperation agreement remains unfulfilled in order to be able to carry out the integration and consolidation of Megatuuli to Enersense as soon as possible. The Board also made a careful assessment of the risks related to a scenario where the cooperation agreement would not be concluded at all. Enersense estimates that the cooperation agreement will be concluded based on the preliminary agreement during February 2022.   

As previously announced, the purchase price of the Share Transaction, a total of EUR 18.5 million, was agreed to be paid by means of the issuance of new Enersense shares. As set out in the share purchase agreement and as confirmed by the parties in connection with the completion preparations of the Share Transaction, the number of new shares is determined five business days before the completion of the Share Transaction based on the 25 business day’s volume-weighted average price (VWAP) of the Enersense share on the Nasdaq Helsinki, provided that the volume-weighted average price shall not be less than EUR 7,1199380009819. The volume-weighted average price calculated as set out above was EUR 6,91 and thus, the agreed minimum amount of EUR 7,1199380009819 was used when determining the number of new shares.  

Enersense's Board has today decided, based on the authorisation granted by the Extraordinary General Meeting of 11 January 2022, on a directed share issue of a total of 2,598,331 new shares in relation to the Share Transaction and subject to its completion. The subscription price of the new share is EUR 7,1199380009819 per share. The total subscription price will be recorded in full in Enersense’s invested unrestricted equity reserve, and no changes will be made to Enersense’s share capital.  

The new Enersense shares will be issued as consideration to the sellers and will be subscribed against the transfer of Megatuuli’s voting shares at the completion of the Share Transaction which is expected to be completed on 1 February 2022. The new shares are to be notified for registration with the Trade Register following the completion of the Share Transaction. A separate announcement will be issued on the completion of the Share Transaction and registration of the new Enersense shares. The new shares are subject to a lock-up restriction and security arrangement concerning 50% of the shares issued as consideration to Megatuuli’s sellers.  The restrictions will be lifted 24 months after the completion of the Share Transaction. 

Following the subscription and registration of the new shares, the number of Enersense's shares amounts to 15,996,060, and the number of new shares accounts for approximately 16.24 per cent of Enersense’s share capital following the registration of the new shares. Enersense will submit an application on the listing of the new shares to the Nasdaq Helsinki in the same class as the current shares of Enersense following their registration in the Trade Register. 

As previously announced, the sellers of the Share Transaction will, following the completion of the Share Transaction, remain as the minority shareholders of Megatuuli’s new series of non-voting shares, which will, based on the shareholder agreement concluded between Enersense and the minority shareholders, entitle these minority shareholders to dividends based on sales revenues from certain wind farms under development by Megatuuli and its partners. These minority shareholders will have no other rights to Megatuuli’s distribution of profit, nor will they have, subject to certain exceptions, any other rights related to Megatuuli. The minority shareholders’ holding in Megatuuli will expire once Megatuuli has paid them the agreed dividends based on revenues from wind farms under development. 

As previously announced, the Share Transaction is, upon its completion, expected to improve Enersense’s financial position in 2022 and the company’s performance over the long term. The revenues from certain future projects which are the subject of the series of non-voting Megatuuli shares are expected to have a EUR 20-40 million impact on Enersense’ EBIT by 2025. In terms of distributable net profit, Enersense’s share of the said amount is expected to be around one third and the share of the non-voting shares held by the sellers around two thirds. The first projects are expected to provide revenues during 2022.  For Megatuuli’s other projects, which are expected to provide revenues from 2024 onwards, Enersense’s share of net profit is 100 per cent for the financial year. The timing of the completion of the projects and the related revenues are dependent on certain key partners of Megatuuli, which can affect the realisation of the revenues and their schedule in a way which is outside the control of Megatuuli and Enersense.  

In addition, the most typical risks and uncertainties relating to wind farm development operations and the related revenues include the approvability of projects, as well as complaints related to statutory land use planning processes and permit procedures in particular, which may delay or prevent the implementation of the projects. Megatuuli’s operations also focus on early-stage development work in wind power projects, and the implementation of development projects depends on certain key partners and the continuity of contracts with these partners, which requires, for example, that Megatuuli is able to comply with the obligations included in such contracts.  

As announced earlier, the Share Transaction will, upon its completion, have an impact on Enersense’s long-term numerical targets, which the company will update accordingly during the first quarter of 2022.  In the future, Megatuuli will be reported as part of Enersense’s Power segment. 

Important notice 

This release is not an offer for sale of securities in the United States. Securities may not be sold in the United States absent registration with the United States Securities and Exchange Commission or an exemption from registration under the U.S. Securities Act of 1933, as amended. The Company does not intend to register any part of the share issue in the United States or to conduct a public offering of securities in the United States. 

The distribution of this release may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restrictions. The information contained herein is not for publication or distribution, in whole or in part, directly or indirectly, in or into United States, Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, South Africa or any other jurisdiction where such publication or distribution would violate applicable laws or rules or would require additional documents to be completed or registered or require any measure to be undertaken in addition to the requirements under Finnish law. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This release is not directed to, and is not intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction. 

This release does not constitute a prospectus as defined in the Prospectus Regulation and, as such, it does not constitute or form part of, and should not be construed as, an offer to sell, or a solicitation or invitation of any offer to buy, acquire or subscribe for, any securities or an inducement to enter into investment activity in relation to any securities.  No part of this release, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. The information contained in this release has not been independently verified, does not purport to be full or complete and may be subject to change. No representation, warranty or undertaking, expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. The Company or any of its affiliates, advisors or representatives or any other person, shall have no liability whatsoever (in negligence or otherwise) for any loss however arising from any use of this release or its contents or otherwise arising in connection with this release. Each person must rely on their own examination and analysis of the Company, its securities and the transactions, including the merits and risks involved. 

This release includes forward-looking statements that are based on present plans, estimates, projections, and expectations and are not guarantees of future performance. They are based on certain expectations and assumptions, which, even though they seem to be reasonable at present, may turn out to be incorrect. Investors should not rely on these forward-looking statements. Numerous factors may cause the actual results of operations or financial condition of the Company to differ materially from those expressed or implied in the forward-looking statements. The Company or any of its affiliates, advisors or representatives or any other person undertakes no obligation to review or confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise after the date of this release. Further, there can be no certainty that the transaction will be completed in the manner and timeframe described in this release, or at all

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