GomSpace Group resolves on a rights issue of approximately SEK 298 million

On 28 September 2018, the board of directors of GomSpace Group AB (publ) ("GomSpace" or the "Company") announced its intention, subject to an authorization subsequently received at the extraordinary general meeting held on 16 October 2018, to carry out a rights issue of approximately SEK 300 million with preferential rights for existing shareholders. GomSpace reports , through this press release, that the board of directors has utilized the authorization and resolved on a rights issue with preferential rights for existing shareholders (the "Rights Issue"), including full terms.

GomSpace, founded in 2007 and with operational headquarter in Denmark, is a global designer, integrator and manufacturer of high-end nanosatellites for customers within the academic, government and commercial markets. GomSpace is at the forefront of technological development, moving the boundaries for what has been regarded as possible to achieve with nanosatellite technology.

The strong growth since the IPO in June 2016, with a total growth of 211 percent (250 percent without elimination of transactions between group companies), has accelerated investments in production capacity, project management and product development. The opportunities for migrating space technology from high cost solutions to low cost solutions keep unfolding and the area where GomSpace has invested the most is in R and D.

A series of new products are now being finalized and made ready for sale to customers, including advanced power solutions, improved radio payload technologies as well as new deployable solar panel structures. In parallel GomSpace has prepared for scaling up and industrializing the production. Significant scale benefits are expected to be achieved in the transition phase, moving from single satellite production, to industrialized assembly of larger quantities.

With these new products and capabilities, the Company has a very strong platform for the next phase, increasing the commercial focus. The transition into the next phase also provides opportunities in optimising the organizational structure and reduce development costs. This is part of the recently communicated new five-year business plan taking GomSpace to positive cash flows.

The Company has until today received more in orbit demonstration projects than expected. The future potential has thereby improved further as these projects could convert into significant constellation project orders in the medium term. In addition, the build-up of the dedicated Luxembourg based service operation (constellation management) is expected to grow quickly with a significant contribution to sales.

The strategy and business plan review, initiated by the board of directors, was conducted in order to fully grasp the underlying market potential and newly identified application areas and solutions for GomSpace's products. The review resulted in the recently communicated new 5-year business plan, including an upward revision of the long-term ambitions for 2023 and a defined capital need until the Company is expected to be cash flow positive. The number of IOD customers the Company already has and the prospects GomSpace has identified, make GomSpace confident that the Company will achieve the new long term financial ambitions.

Following the review a rights issue was deemed by the board of directors as the most favorable solution for the shareholders. With the updated business plan and current outlook, the Company is expected to be fully financed with a SEK 298 million rights issue before transaction costs until the Company is expected to be cash flow positive.

On that basis, the board of directors has now utilized its authorization and resolved on a Rights Issue of a total of SEK 298 million before transaction costs. Following a successful Rights Issue, GomSpace intends to terminate the SEK 300 million optional agreement with the European Select Growth Opportunities Fund entered into in July 2018.

Principal terms of the Rights Issue
Shareholders in GomSpace have preferential rights to subcribe for new shares in proportion to the number of shares held on the record date of participation (19 November 2018). Each share held on the record date of participation entitles to one (1) subscription right. Each subscription right confers right to subscribe for one (1) new share.

The subscription price has been set to SEK 10.50 per new share. At full subscription, the total proceeds will be approximately SEK 298 million before deduction of transaction costs, by issuing no more than 28,340,667 new shares, resulting in an increase in the share capital of up to SEK 1,983,846.69. Following the Rights Issue, the number of outstanding shares in GomSpace will amount to no more than 56,681,334. The Rights Issue may thus entail a dilution of 50 percent. Shareholders not participating in the Rights Issue have the opportunity to obtain financial compensation for the dilution by selling their subscription rights.

If not all new shares are subscribed for by exercise of subscription rights in accordance with the shareholders' preferential rights, the board of directors shall resolve on allocation of new shares subscribed for without subscription rights up to the maximum amount of the Rights Issue.

In such case, priority will be given firstly to those who have also subscribed for new shares by exercise of subscription rights and secondly, to those who have applied to subscribe for new shares without subscription rights.

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GomSpace Group
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