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Storytel AB (publ) (“Storytel” or the “Company”) has, in accordance with the announcement made in a press release on 9 November 2022, successfully completed a directed issue of 8,791,209 class B shares corresponding to approximately SEK 400 million, of which 7,586,879 class B shares were resolved by the Board of Directors based on the authorisation granted by the Annual General Meeting on 4 May 2022 (“Tranche 1”) and 1,204,330 class B shares were resolved by the Board of Directors subject to the approval of an Extraordinary General Meeting (“Tranche 2”) (the “Directed Issue”). The subscription price in the Directed Issue was set at SEK 45.50 per class B share and was determined through an accelerated bookbuilding procedure performed by ABG Sundal Collier AB and Swedbank AB (publ). The Directed Issue was significantly oversubscribed. A number of Swedish and international institutional investors participated, including both new and current owners. Storytel’s two largest shareholders, EQT Public Value Investment Sàrl (“EQT”) and Roxette Photo NV (“Roxette”), together with the Finnish strategic investor Otava Ltd (“Otava”), has undertaken to subscribe for all shares in Tranche 2. An Extraordinary General Meeting is expected to be held on 28 November 2022 and notice will be published on 10 November 2022.
“We are thankful for the support and trust in Storytel’s performance and business plans expressed by our investors and new shareholders via this financing. We are particularly pleased to add as shareholder Otava Ltd, owner of leading Finnish publishers and media companies, and look forward to exploring opportunities to deepen our relationship in the fast growing Finnish audiobook market,” says Johannes Larcher, CEO of Storytel.
Otava is the parent company of the Otava Group, which ranks third among media and communications publishers in Finland and includes the current Finnish market leader in general literature, Otava Publishing Company Ltd with a roster of leading Finnish and international authors.
Summary of the Directed Issue
Based on the outcome of the accelerated bookbuilding procedure, the Board of Directors of Storytel has, as indicated in the Company’s press release on 9 November 2022, resolved on an issue of a total of 8,791,209 class B shares at a subscription price of SEK 45.50 per share. The Directed Issue raises gross proceeds for the Company amounting to approximately SEK 400 million before deduction of costs related to the transaction.
The Board of Directors’ resolution to issue new class B shares is made (i) partly on the basis of the authorisation granted by the Annual General Meeting on 4 May 2022 on a directed issue of 7,586,879 class B shares (Tranche 1) and (ii) partly subject to an Extraordinary General Meeting approving the Board of Directors’ resolution on a directed issue of 1,204,330 class B shares (Tranche 2). The Directed Issue entails a dilution of approximately 11.4 percent of the number of shares and approximately 11.4 percent of the votes in the Company.
The Directed Issue will increase the number of outstanding shares by 8,791,209 from a total of 68,281,911 to a total of 77,073,120 and outstanding votes by 8,791,209 from a total of 68,287,626 to a total of 77,078,835 (in total 77,073,120 shares, divided into 77,072,485 class B shares and 635 class A shares). The share capital increases by SEK 4,395,604.5 from SEK 34,140,955.5 to SEK 38,536,560.0. The Directed Issue was directed to selected Swedish and international investors, including Otava, EQT, C Worldwide Asset Management, Roxette and Richard Båge.
The Company intends to use the net proceeds from the Directed Issue to, inter alia, partially repay a bridge loan facility totalling SEK 500 million provided by Swedbank AB (publ), as part of the Company’s financing of the acquisition of Audiobooks.com, which was announced on 12 November 2021 and 7 January 2022. Swedbank AB (publ) has offered to refinance SEK 200 million of the outstanding bridge loan facility with a term loan of the same amount. The proceeds will also strengthen Storytel’s balance sheet and capital structure and thereby increase the Company’s financial flexibility to pursue future strategic opportunities in line with the Company’s implemented strategy of profitable growth.
Considerations made by the Board of Directors
The Company’s Board of Directors has made an overall assessment and carefully considered the possibility of a rights issue to raise the required equity, but believes that this would, inter alia, entail a risk that the Company would not be able to meet its capital needs while maintaining an optimal capital structure. Prior to the Directed Issue, the Board of Directors has concluded that a rights issue would entail significantly longer execution time and thereby increased market risk exposure compared to a directed share issue. In addition, given the market volatility observed in 2022, which is still ongoing, the Board of Directors has assessed that a rights issue would also require significant underwriting by a syndicate of underwriters, which would entail additional costs and/or additional dilution depending on the type of consideration paid for such underwriting commitments. Moreover, unlike a rights issue, the Directed Issue has broadened the shareholder base and provided the Company with new reputable institutional owners and strategic investors, which the Board of Directors believes will strengthen the liquidity of the shares and be beneficial to the Company. Furthermore, the Board of Directors considers that an additional reason for the deviation from the shareholders’ preferential rights is to ensure a strong balance sheet and a balanced general level of risk in the current market situation. In light of the above, the Board of Directors has made the assessment that the Directed Issue with deviation from the shareholders’ preferential rights is the most favourable alternative for Storytel and in the best interest of the Company’s shareholders.
As the subscription price in the Directed Issue has been determined through a bookbuilding procedure with institutional investors, it is the Board of Directors’ assessment that the subscription price reflects current market conditions and demand and therefore is in line with market conditions
Extraordinary General Meeting
The Extraordinary General Meeting is expected to be held on 28 November 2022. Storytel’s two largest shareholders, EQT and Roxette together with Otava, has, to facilitate the execution of the Directed Issue, undertaken to subscribe for all 1,204,330 class B shares in Tranche 2. Notice of such Extraordinary General Meeting will be issued separately on 10 November 2022. The Board of Directors’ resolution on Tranche 1 is independent of whether or not an approval of Tranche 2 is made.
Lock up undertakings
In connection with the Directed Issue, the Company has, subject to customary exceptions, agreed to a lock-up undertaking on future share issuances for a period of 90 days following completion the of the Directed Issue. Members of the Company’s Board of Director and management, have, subject to customary exceptions, agreed not to sell their shares in the Company for a period of 90 days after the date of registration of the shares issued in Tranche 2 in connection with the Directed Issue with the Swedish Companies Registration Office.
Advisers
In conjunction with the Directed Issue, the Company has engaged ABG Sundal Collier AB and Swedbank AB (publ) as Joint Bookrunners. KANTER Advokatbyrå KB was legal advisor to the Company and Baker McKenzie Advokatbyrå KB was legal advisor to the Joint Bookrunners.
This information constitutes inside information as Storytel AB (publ) is obliged to disclose under the EU Market Abuse Regulation 596/2014. The information has been provided by the contact person below for publication at the point in time specified by Storytel’s news distributer Cision at the publication of this press release.
FNCA Sweden AB is the company’s certified adviser.
For more information, please contact:
Andreas Lindblom, Head of Investor Relations
Tel: +46 72 506 14 22
Email: andreas.lindblom@storytel.com
Dan Panas, Head of Global Communications & PR
Tel: +46 70 186 52 90
Email: dan.panas@storytel.com
About Storytel
Storytel is one of the world’s largest audiobook and e-book streaming services and offers more than one million titles on a global scale. Our vision is to make the world a more empathetic and creative place, with great stories to be shared and enjoyed by anyone, anywhere and anytime. The streaming business within the Storytel Group is conducted under the brands Storytel, Mofibo and Audiobooks.com. The publishing business is managed by Storytel Books, and by the audiobook publisher StorySide. The Storytel Group operates in over 25 markets. The headquarters is located in Stockholm, Sweden.
