Evolva seeks to raise CHF80m for R&D boost, may seek debt financing
06 Oct 2017 --- Swiss health, wellness and nutrition ingredients company Evolva has announced plans to raise approximately CHF80 million (US$81.7 million) gross proceeds in two separate equity transactions. Swiss asset manager Pictet Asset Management SA and British investment firm Cologny Advisors LLP have committed, subject to certain conditions, to subscribe for shares in a private placement. Evolva now plans to carry out a discounted rights offering in early November 2017.
The funds will be used to continue investing in R&D to further improve yeast strain efficiency as well as in commercialization efforts of products. Additionally, the company plans to potentially raise debt financing in the coming months to meet its contractual obligations to commercial partner Cargill, Inc., which is expected to launch the stevia sweetener EverSweet in 2018. The terms of such debt financing, if any, will be communicated at the relevant time, the company notes.
Financing transactions
Evolva plans to raise approximately CHF80 million gross proceeds by way of two separate capital increases in October and November 2017.
As a first step, Swiss asset manager Pictet and British investment firm Cologny have committed, subject to certain conditions, to acquire a total of 68 million shares via private placements. If exercised in full, Pictet will increase its shareholding in Evolva from currently around 1 percent to 10 percent and Cologny will acquire a shareholding of around 5 percent.
The purchase price of each share will be determined on market terms applying a customary discount. Evolva will use existing authorized capital of up to 50 million shares under exclusion of subscription rights for existing shareholders and 18 million treasury shares for the private placements. Based on the current stock price, the placement is expected to yield approximately CHF27 million.
In addition, Pictet and Cologny have agreed to exercise any subscription rights that will be allotted to the privately placed shares in connection with the planned rights offering and not to dispose of these shares until the completion of the rights offering.
Pictet and Cologny have also agreed, subject to customary conditions, to purchase shares in the rights offering in respect of which rights have not been validly exercised or placed immediately after the end of the rights exercise period at a price corresponding to the rights offering price, provided that their respective aggregate shareholdings do not exceed 10 percent and 5 percent, respectively, of the shares issued after the completion of the rights offering.
Pictet and Cologny can withdraw from their commitments to purchase these shares and to exercise the respective subscription rights if the Extraordinary General Meeting (EGM) does not approve the proposals of the Board of Directors to increase Evolva’s share capital through a discounted right offering. They can also withdraw from their commitments if Evolva’s share price exceeds CHF0.42 at the time periods relevant for the calculation of the purchase price for these shares.
As a second step, Evolva’s Board of Directors has decided to propose an ordinary capital increase to an EGM to be held on 26 October 2017. The capital increase shall be executed by way of a discounted rights offering following the EGM.
Assuming the approval of the proposed capital increase by the EGM, the new shares will be offered to the existing Evolva shareholders through subscription rights. The rights offering size would be such that the gross proceeds of the two capital increases amount to approximately CHF80 million gross proceeds in total.
The invitation to the EGM will be sent to Evolva shareholders in the next days. Evolva’s Board of Directors will propose an ordinary capital increase of up to 360 million shares to the EGM.
On or before the EGM, the Board of Directors may, depending on market conditions and other relevant considerations, make a downward adjustment of the exact maximum number of new shares to be issued and accordingly submit an adjusted proposal for approval at the EGM. The final terms of the rights offering will be determined immediately prior to the EGM and communicated in the morning of 26 October 2017.
Last month, Evolva announced the details of the next phase of its corporate evolution, which included moneysaving measures, considerable growth of revenues, commercial collaborations as well as a reduction of its staff numbers from 178 to approximately 100.
