LEHTO GROUP PLC ANNOUNCES THE INITIAL PRICE RANGE FOR ITS PLANNED INITIAL PUBLIC OFFERING; THE FINNISH LANGUAGE PROSPECTUS HAS BEEN APPROVED

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO AUSTRALIA, CANADA, HONG KONG, JAPAN, SINGAPORE, SOUTH AFRICA OR THE UNITED STATES, OR ANY OTHER JURISDICTION IN WHICH RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL LEHTO GROUP PLC ANNOUNCES THE INITIAL PRICE RANGE FOR ITS PLANNED INITIAL PUBLIC OFFERING; THE FINNISH LANGUAGE PROSPECTUS HAS BEEN APPROVED Lehto Group Plc ("Lehto Group" or "Company") announces the initial price range for the share issue and sale in connection with its planned listing of its shares ("Initial Public Offering" or "IPO", as defined in more detail below)...

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO AUSTRALIA, CANADA, HONG KONG, JAPAN, SINGAPORE, SOUTH AFRICA OR THE UNITED STATES, OR ANY OTHER JURISDICTION IN WHICH RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL

LEHTO GROUP PLC ANNOUNCES THE INITIAL PRICE RANGE FOR ITS PLANNED INITIAL PUBLIC OFFERING; THE FINNISH LANGUAGE PROSPECTUS HAS BEEN APPROVED

Lehto Group Plc ("Lehto Group" or "Company") announces the initial price range for the share issue and sale in connection with its planned listing of its shares ("Initial Public Offering" or "IPO", as defined in more detail below). The Company announced on 29 March 2016 that it is planning an initial public offering on the official list of Nasdaq Helsinki Ltd ("Nasdaq Helsinki" or "Helsinki Stock Exchange"). Pursuant to an authorisation by the Annual General Meeting held on 30 March 2016, the Company's Board of Directors has decided to arrange the Initial Public Offering.

IPO in brief

• The preliminary subscription price in the IPO is EUR 4.50-5.10 per share ("Initial Price Range").
• In the planned Initial Public Offering:
  • The Company preliminarily offers up to 11,874,705 new shares in the Company ("Issue Shares") to institutional investors in Finland and internationally ("Institutional Offering"), to private individuals and organisations in Finland ("Public Offering"), as well as to the personnel of the Company in Finland ("Personnel Offering", and together with the Institutional Offering and the Public Offering, "Share Issue").
  • In addition, certain shareholders of the Company ("Selling Shareholders") will preliminarily offer for purchase up to 1,732,340 shares ("Sale Shares", and together with the Issue Shares, "Offer Shares") to institutional investors in Finland and internationally ("Share Sale", and together with the Share Issue, "Offering").
  • The Selling Shareholders have granted OP Corporate Bank plc an over-allotment option ("Over-Allotment Option") exercisable within 30 days of the commencement of trading in the Company's shares ("Shares") on the Helsinki Stock Exchange to purchase or to procure purchasers for up to 1,470,821 Shares in the Company at the final subscription price as the maximum price solely to cover over-allotments.
  • Certain institutional investors ("Cornerstone Investors") have each individually committed to subscribe for Offer Shares in the IPO at the final subscription price. The total commitments of the Cornerstone Investors amount to EUR 25 million. The Cornerstone Investors are certain funds of Danske Invest Fund Management Ltd (EUR 6.5 million), certain funds of OP Fund Management Company Ltd (EUR 6 million), Mevita Invest Oy (EUR 2.5 million) and certain funds represented by SEB Investment Management AB (EUR 10 million).
• The Initial Price Range implies a pre-money market capitalisation for the Company of approximately EUR 204-231 million.
• Assuming that Issue Shares corresponding to gross proceeds of EUR 60.5 million are subscribed for in the Share Issue, that the maximum amount of Sale Shares is sold in the Share Sale and that the Over-Allotment Option is exercised in full, the transaction value of the IPO is approximately EUR 67.3-76.8 million based on the Initial Price Range.
• Assuming that all Issue Shares are fully subscribed for in the Share Issue and the Conversion (as defined below) is fully subscribed for, the total number of the Shares will increase to up to 58,392,838 Shares.
• The subscription period for the Public Offering will commence on 13 April 2016 at 9.00 a.m. EET and end at the latest on 25 April 2016 at 6.00 p.m. EET.
• The subscription period for the Personnel Offering will commence on 13 April 2016 at 9.00 a.m. EET and end at the latest on 20 April 2016 at 6.00 p.m. EET.
• The subscription period for the Institutional Offering and Share Sale will commence on 13 April 2016 at 9.00 a.m. EET and end at the latest on 26 April 2016 at 2.00 p.m. EET.
• The first day of trading on the prelist of Nasdaq Helsinki is expected to be 28 April 2016 and the shares will trade under the symbol "LEHTO".

Hannu Lehto, CEO of Lehto Group comments:

"Lehto Group has grown strongly into one the largest construction and real estate groups in Finland. We believe that the listing will help us to continue the dedicated implementation of our growth strategy and further enhance awareness of the Company. Our operations are led by an economically driven construction operating model which we have developed. With this model that is based on strong planning management and module based innovations we aim to reform the operation models of construction and to ensure high quality construction and cost and time benefits for our clients. The listing will also improve our transparency and support our image as an employer."

Pertti Huuskonen, chairman of Lehto Group's Board of Directors comments:

"Because of our economically driven construction operating model and conceptualised solutions for different customer groups, Lehto Group has good growth potential also in the future. As a result of the listing our ownership base broadens and we want to offer the Company's new shareholders the opportunity to be part of the future development of Lehto Group. The listing gives the Company the prospect to continue to grow and supports the funding of the most important upcoming strategic projects as well as the development of new innovative products."

Background for the listing and use of proceeds

The objective of the listing is to enable the successful implementation of the Company's strategy, for which the Company is also aiming to raise new funds through a share issue in order to finance growth. In addition, the listing is expected to improve Lehto Group's profile and credibility among its existing and potential new customers, partners and investors. The Company believes that a higher profile and credibility will promote Lehto Group's business operations in both private and public sector construction projects and that it supports the Company's image as an employer. With the Initial Public Offering, the Company aims to expand its shareholder base with both Finnish and international investors. As the shareholder base expands, the number of shareholders who are independent of the Company will increase, supporting the liquidity of the Company's share and the formation of the share price. Additionally, the listing provides the Company's current shareholders with the opportunity to trade in their Shares on market terms. The listing is also expected to give the Company a better opportunity to use its own Shares to finance business acquisitions in support of its strategy.

The Company aims to use the proceeds from the Initial Public Offering to ensure an adequate level of self-financing for the Company's key future projects in line with its strategy. The proceeds from the Initial Public Offering will be used, among others, (i) for the acquisition of plots and land areas; (ii) for the development of module production and concept construction; (iii) for the acquisition of properties for purpose of use alternations; (iv) to increase commercial property development; and (v) to ensure sufficient funds for working capital, corporate acquisitions, international expansion and other strategic investments as they arise during the Company's growth. The proceeds from the Initial Public Offering will also enable and facilitate the availability of debt financing on terms that are favourable for the Company. In addition to the proceeds from the Initial Public Offering the Company will require debt financing in order to implement its growth strategy, which the Company will be acquiring from financial institutions mainly on a project-specific level.

About the IPO

The Annual General Meeting of shareholders of the Company resolved on 30 March 2016 to authorise the Board of Directors of the Company to decide on an increase in the number of the Shares by a maximum of 16,500,000 new Shares in the Initial Public Offering. Based on the authorisation granted by the Annual General Meeting of the shareholders, the Board of Directors resolved on 11 April 2016 to issue a maximum of 11,874,705 Issue Shares to be subscribed in the Share Issue by way of an offer to institutional investors in Finland and internationally and private individuals and entities in Finland and to the personnel of the Company in Finland.

In accordance with the terms and conditions of the convertible loan, Osuuskunta PPO has a right and an obligation to convert the convertible loan to the Shares of the Company in connection with the Initial Public Offering ("Conversion"). The maximum amount to be converted is EUR 5,000,000, provided however, that in accordance with the terms and conditions of the convertible loan, the amount of the new Shares offered in the Conversion may not exceed 2,918,368. Pursuant to the terms and conditions of the convertible loan the subscription price of the Shares in the Conversion is 0.92 x the final subscription price in the Institutional Offering. Calculated based on the lowest price of the Initial Price Range, the new Shares offered in the Conversion amount to no more than 1,207,729 new Shares, which represent approximately no more than 2.7% of the Shares and votes prior to the Initial Public Offering, and approximately 2.1% of the Shares and votes after the Initial Public Offering, assuming that all Issue Shares preliminarily offered in the Initial Public Offering and the Conversion are fully subscribed for.

As a result of the Share Issue, the number of the Shares can increase to a maximum of 57,185,109 Shares and after the Conversion is fully executed to a maximum of 58,392,838 Shares. The Issue Shares to be released in the Share Issue represent approximately 26.2% of the Shares and votes before the Initial Public Offering and approximately 20.4% after the Initial Public Offering, assuming that all Issue Shares preliminarily offered in the Initial Public Offering and the Conversion are fully subscribed for.

The Issue Shares are offered in deviation from the shareholders' pre-emptive subscription right in order to broaden the Company's ownership base and strengthen the capital structure. Broadening the Company's ownership base enables the listing of the Shares for trading on the official list of Helsinki Stock Exchange. The payment made to the Company for the approved Issue Share subscriptions will be booked in its entirety in the invested unrestricted equity fund. Thus, the Company's share capital will not increase in connection with the Share Issue.

The Selling Shareholders will preliminarily offer for purchase no more than 1,732,340 Sale Shares to institutional investors in Finland and internationally. The Sale Shares represent approximately 3.8% of the Shares and votes before the Initial Public Offering and approximately 3.0% after the Initial Public Offering, provided that all Issue Shares preliminary offered in the Initial Public Offering and the Conversion are fully subscribed for. The Selling Shareholders will remain major shareholders in the Company also after the IPO.

The terms and conditions of the Initial Public Offering are annexed to this release in their entirety.

OP Corporate Bank plc acts as the Global Coordinator and Joint Bookrunner for the Initial Public Offering and Pareto Securities Oy as Joint Bookrunner (together, "Bookrunners"). Krogerus Attorneys Ltd acts as the legal advisor of the Company. Roschier, Attorneys Ltd. acts as the legal advisor of the Bookrunners.

Preliminary timetable of the Initial Public Offering and listing (all times are Finnish time)

• Approval of Finnish language prospectus: 11 April 2016
• The subscription period for the Institutional Offering, Share Sale, Public Offering and Personnel Offering will commence on: 13 April 2016 at 9.00 a.m.
• The subscription period for the Institutional Offering, Share Sale, Public Offering and Personnel Offering can be discontinued (at the earliest): 20 April 2016 at 6.00 p.m.
• The subscription period for the Personnel Offering ends (estimated): 20 April 2016 at 6.00 p.m.
• The subscription period for the Public Offering ends (estimated): 25 April 2016 at 6.00 p.m.
• The subscription period for the Institutional Offering and Share Sale ends (estimated): 26 April 2016 at 2.00 p.m.
• The results and the final subscription price for the Initial Public Offering will be published (estimated): 27 April 2016
• The Shares will become subject to trading on the prelist of the Helsinki Stock Exchange (estimated): 28 April 2016
• The Shares will become subject to trading on the official list of the Helsinki Stock Exchange (estimated): 2 May 2016

The listing and the publication of the offering circular

Prior to the Initial Public Offering the Company's shares have not been subject to trading on a regulated market or on any multilateral trading facility. The Company will submit an application for the Shares to be admitted to trading on the official list of Helsinki Stock Exchange. Trading of the Shares on the prelist of the Helsinki Stock Exchange is expected to commence on or about 28 April 2016 and on the official list of the Helsinki Stock Exchange on or about 2 May 2016. The Shares will trade under the symbol "LEHTO".

The Company has submitted a prospectus for approval with the Finnish Financial Supervisory Authority. The Finnish Financial Supervisory Authority has approved the Finnish language prospectus for the Initial Public Offering on 11 April 2016. The Finnish language prospectus and marketing brochure will be available in electronic format on Lehto Group's website at www.lehto.fi/listautuminen on and on OP Financial Group's website at www.op.fi/merkinta or about 12 April 2016. In addition, the Finnish language prospectus and marketing brochure will be available in hard copy at the head office of the Company (Voimatie 6 B, FI-90440 Kempele), Helsinki Stock Exchange (Fabianinkatu 14, FI-00100 Helsinki) and from branch offices of co-operative banks belonging to the OP Financial Group on or about 14 April 2016.

Further information on the IPO and places of subscription can be obtained from the websites www.lehto.fi/listautuminen and www.op.fi/merkinta and from the branch offices of co-operative banks belonging to the OP Financial Group.

Public events

Lehto Group organises events for the public, analysts and media representatives:

Helsinki, Wednesday 13 April 2016 at 6.00-8.00 p.m. EET, Scandic Hotel Grand Marina, Fennia II Hall, Katajanokanlaituri 6, Helsinki.

Tampere, Thursday 14 April 2016 at 6.00-8.00 p.m. EET, Tampereen Seudun Osuuspankki, Personnel restaurant Holvi, Pellavatehtaankatu 21 C, 5th floor, Tampere.

Oulu, Tuesday 19 April 2016 at 6.00-8.00 p.m. EET, Hotel Lasaretti, Aurora Hall, Kasarmintie 13, Oulu.

Turku, Wednesday 20 April 2016 at 6.00-8.00 p.m. EET, Conference Centre Mauno, President Auditorium, Tykistökatu 6, Turku.

Webinar: Alternatively, you can participate in the webinar organised via OP Financial Group's websites, where a company presentation with the same content is held on Thursday 21 April 2016 at 7.00-8.00 p.m. Instructions on how to take part in the webinar are available on the website op.fi approximately one week before the event.

Registration: The number of participants per each event is limited, and therefore we request you to register for the event of your choice at www.lyyti.in/lehto. The number of participants for the webinar is not limited, and you can register for the event approximately one week prior to the event at www.op.fi. Please note that all presentations in the events will be made in Finnish only.

Lehto Group Plc

Pertti Huuskonen, the chairman of the Board of Directors

Hannu Lehto, CEO

More information:

Hannu Lehto, CEO tel. +358 50 028 0448

Veli-Pekka Paloranta, CFO tel. +358 400 944 074

 

Lehto Group in brief

Lehto Group is a Finnish construction and real estate group focusing on economically driven construction. The Company's mission is to be an innovative reformer of the construction industry. The Company has divided its operations into four service areas: Business Premises, Housing, Social Care and Educational Premises and Building Renovation. Lehto Group currently operates in Finland and is geographically concentrated in growth centres, which form a significant part of the construction volume. The Company's headquarters are located in Kempele. The company employed 423 people at the end of the financial year 2015.

 

DISCLAIMER

This announcement is not for publication or distribution, directly or indirectly, in Australia, Canada, Hong Kong, Japan, Singapore, South Africa or the United States, or any other jurisdiction in which release or distribution would be unlawful. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes 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.

The information contained herein shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction. Investors must neither accept any offer for, nor acquire, any securities to which this document refers, unless they do so on the basis of the information contained in the applicable prospectus approved by the Finnish Financial Supervisory Authority and published by the Company.

These written materials do not constitute an offer for sale of securities in the United States, nor may the securities be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder. The securities will not be registered under the U.S. Securities Act of 1933, as amended, and there will be no public offering of the securities in the United States.

The Company has not authorised any offer to the public of securities in any member state of the European Economic Area other than Finland. With respect to each member state of the European Economic Area other than Finland which has implemented the Prospectus Directive (each, a "Relevant Member State"), no action has been undertaken or will be undertaken to make an offer to the public of securities requiring publication of a prospectus in any Relevant Member State. As a result, the securities may only be offered in Relevant Member States (a) to any legal entity which is a qualified investor as defined in the Prospectus Directive; or (b) in any other circumstances falling within Article 3(2) of the Prospectus Directive. For the purposes of this paragraph, the expression "an offer of securities to the public" means the communication in any form and by any means of sufficient information on the terms of the offer and the securities to be offered so as to enable an investor to decide to exercise, purchase or subscribe for the securities, as the same may be varied by any measure implementing the Prospectus Directive in that Relevant Member State, and the expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression "2010 PD Amending Directive" means Directive 2010/73/EU.

The information contained herein shall not constitute a public offering of shares in the United Kingdom. This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (iii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2) of the Order (all such persons together being referred to as "relevant persons"). Any investment activity to which this document relates will be only available to, and will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

This document includes "forward-looking statements" that involve risks, uncertainties and other factors, many of which are outside of the Company's control and could cause actual results to differ materially from the results discussed in the forward-looking statements. Forward-looking statements include statements concerning the Company's dividend policy, financial targets, plans, objectives, goals, future events, performance and/or other information that is not historical information. The Company undertakes no obligation to publicly update or revise forward-looking statements to reflect subsequent events or circumstances after the date made, except as required by law.

The Bookrunners are acting exclusively for the Company in connection with the contemplated listing. The Bookrunners will not regard any other person as their respective client in relation to the listing and will not be responsible to anyone other than the Company for giving advice in relation to the listing or transactions related thereto.

APPENDIX: Terms and conditions of the Initial Public Offering

 

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