DIC Corporation invests nearly US$6 million in Fermentalg in convertible bonds

26 Oct 2017 --- French microalgae specialist Fermentalg has announced the issuance of bonds convertible into shares reserved for Japanese global chemicals industry leader DIC Corporation as part of a global partnership signed on September 11, 2017.

The news comes days after Fermentalg celebrated raising its capital increase by €12.6 million (US$14.8 million) to accelerate its growth in natural food colorings, nutrition and health.

Fermentalg's Annual General Meeting of Shareholders, which met on October 19, adopted the first resolution pertaining to the issuance of 1 million bonds convertible into shares reserved for DIC Corporation.

Fermentalg joined forces with Japanese chemical company the DIC Corporation to target the fast-growing market for natural alternatives to artificial food colorings, bringing together Fermentalg’s unique microalgae strain bank and integrated biotechnology platform with DIC's significant applied research, industrial and commercial resources. Fermentalg told NutritionInsight about its new opportunities with microalgae ingredients at VitaFoods Asia 2017.

Following the meeting on 24 October 2017, DIC Corporation effectively subscribed to the reserved issuance of 1 million bonds convertible into shares at a unitary price of €5.00 per share, representing a total nominal amount of €5 million (US$5.91 million).

The convertible bonds to be issued by Fermentalg will bear annual interest of 5 percent until maturity, namely for a period of three years. The bonds may be converted into new shares at any time, at DIC Corporation's discretion and at a price of €5.00 per share.

Capital increase
On October 23, Fermentalg celebrated raising its capital increase by €12.6 million to accelerate its growth in natural food colorings, nutrition and health.

“I would like to thank all of our shareholders, both old and new, for the support and continued faith they have shown in taking part in this capital increase,” said Philippe Lavielle, Chairman and CEO of Fermentalg, of the raise.

“Combined with the bond issue which will be subscribed by DIC Corporation by November 30, 2017 at the latest, the operation will give us the financial means needed to confidently pursue our strategic roadmap and bring our innovation to the markets,” Lavielle concluded.

Key characteristics of the increase
Demand for the capital increase resulted in the issue of 6,997,715 new shares at a unit price of €2.50, i.e. an oversubscription of 159 percent on the initial offering, taking the total amount to €17,494,288.

Irreducible subscriptions resulted in the issue of 4,163,848 shares following the exercise of 94.71 percent of preferential subscription rights. Reducible subscriptions resulted in the issue of 2,833,867 shares.

The decision by Fermentalg to exercise the extension clause in full resulted in the issue of 5,055,616 new shares and an increase of €12,639,040. Accordingly, reducible subscriptions will only be allocated in part to 891,768 shares.

Following settlement-delivery on 23 October 2017, Fermentalg's capital will be made up of 17,145,135 shares. A request has been submitted to admit the new shares for trading for new shares on Euronext Paris on the same line as existing shares.

The stake of a shareholder who held 1.00 percent of the capital of the company prior to the increase but who did not subscribe to the operation is now reduced to 0.71 percent.

The prospectus linked to the capital increase was approved by the French markets authority, the AMF.