Hexagon Purus ASA – Hexagon Purus launches convertible bond private placement of up to approximately NOK 1,000 million, with pre-commitments of NOK 850 million from strategic investors Mitsui, Hy24 and Hexagon Composites.

December 20, 2023 - Stock Exchange Release

I Stock 1182485631

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, THE HONG KONG SPECIAL ADMINISTRATIVE REGION OF THE PEOPLE'S REPUBLIC OF CHINA, SOUTH AFRICA, NEW ZEALAND, JAPAN OR THE UNITED STATES OF AMERICA, OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

Hexagon Purus ASA – Hexagon Purus launches convertible bond private placement of up to approximately NOK 1,000 million, with pre-commitments of NOK 850 million from strategic investors Mitsui, Hy24 and Hexagon Composites.

(Oslo, Norway, 20 December 2023) Hexagon Purus ASA (“Hexagon Purus” or the “Company”), a world leading manufacturer of zero emission mobility and infrastructure solutions, is today launching a contemplated private placement of senior unsecured convertible bonds (the “Convertible Bonds”) raising gross proceeds of up to NOK 999,950,000 (the “Convertible Bond Private Placement”). The Convertible Bond Private Placement is supported by Mitsui & Co., Ltd. (“Mitsui”), Hy24 through the Clean Hydrogen Equipment Fund (“Hy24”) and Hexagon Composites ASA (“Hexagon Composites”) through pre-commitments and pre-allocations for an aggregate of NOK 850 million.

  • Proceeds will support Hexagon Purus’s growth strategy including its ongoing global capacity expansion program for hydrogen infrastructure and mobility and battery systems and vehicle integration solutions
  • Existing strategic investors Mitsui and Hexagon Composites are joined by Hy24, the world’s largest clean hydrogen pure-play investor
  • The three investors bring access to knowledge and networks across the hydrogen value chain

Mitsui has irrevocably committed to subscribe for, and will receive an allocation of, NOK 500 million principal amount of Convertible Bonds as part of its existing strategic alliance and non-binding memorandum of understanding entered into in March 2023 with the Company (the “Mitsui MoU”). Mitsui is a key strategic partner to Hexagon Purus through its hydrogen industry expertise and network. The Mitsui MoU has a total monetary scope of up to NOK 2,000 million, of which NOK 1,000 million in aggregate will have been committed after this Convertible Bond Private Placement. The intention in the Mitsui MoU is that the remaining NOK 1,000 million will, if committed, be provided as common equity.

Hy24 is the world’s first investment manager fully dedicated to scaling up the clean hydrogen economy. Hy24 has irrevocably committed to subscribe for, and will receive an allocation of, NOK 150 million in the Convertible Bond Private Placement. Hy24 contemplates the possibility to participate as a common equity anchor in subsequent financing rounds. On the back of Hy24’s investment and dedication to value creation through its expertise in the clean hydrogen industry, the Company intends to nominate a representative from Hy24 as a Board Observer to the Hexagon Purus Board of Directors. Hy24 will contribute to bolstering Hexagon Purus’s global scaling efforts by leveraging its financial and industrial expertise, thus playing its role as a catalyst for the entire clean hydrogen value chain.

Hexagon Composites, the Company’s largest shareholder, has irrevocably committed to subscribe for, and will receive an allocation of, NOK 200 million in the Convertible Bond Private Placement.

The net proceeds from the Convertible Bond Private Placement will be used to support Hexagon Purus’ growth strategy, including its ongoing global capacity expansion program and delivering on customer commitments on its path to reaching its financial ambitions for 2025, which were set out at the Company’s Capital Markets Day in 2022, and restated on 7 November 2023 during the Company’s interim report for the third quarter of 2023.

Morten Holum, CEO of Hexagon Purus, comments: “We operate in an increasingly supportive regulatory environment with large investments being made into renewable energy generation and hydrogen to support the clean energy transition. This investment ensures that we can continue to scale up our manufacturing capacity to deliver on existing customer contracts for hydrogen infrastructure and prepare for serial volume of zero emission mobility as demand increases. We are pleased to have the continued investment from Mitsui and Hexagon Composites and welcome Hy24 as a new strategic investor bringing valuable industry expertise from the clean hydrogen industry. Of the numerous technology companies in the hydrogen space, Hy24’s selection of us is clear recognition that Hexagon Purus is the world-leading provider of zero emission mobility and hydrogen infrastructure solutions.”

Hiroshi Kakiuchi, Managing Director, Chief Operating Officer of Performance Materials Business Unit at Mitsui comments: “Mitsui views the progress of Hexagon Purus very positively and sees clear market demand for the Company´s hydrogen infrastructure solutions since the last capital raise in March. Additionally, Hexagon Purus has successfully secured new orders in the mobility sector, further showcasing its ability to address emerging needs in the future. In Mitsui we recognize the Company's role in facilitating the transition to a zero-emission society, and have high confidence in Hexagon Purus' robust technology offering which can help turn the tide against climate change. We see clear synergies between Hexagon Purus' competitive zero-emission solutions and our extensive global network. Mitsui is pleased to support Hexagon Purus' strategic development through this investment, and we look forward to the continued growth and contribution of Hexagon Purus in realizing a zero-emission society.”

Guillaume Lesueur, Managing Director & Head of the Clean Hydrogen Equipment Fund at Hy24, said: “This investment, the first by our Equipment Fund, reinforces Hy24's position as a strategic investor and a catalyst in fostering the clean hydrogen economy. It bolsters the growth initiatives of Hexagon Purus, a global leader in the midstream of the hydrogen sector, exemplifying our Fund's commitment to the mature and pivotal hydrogen technologies that are essential to decarbonizing industry and mobility sectors.”

Jon Erik Engeset, CEO of Hexagon Composites, comments: “Hexagon Purus has assumed market-leading positions in some of the strongest growing zero emission mobility and infrastructure technology segments globally. We are highly satisfied with the Company’s performance and growth to date. We intend to continue working closely together with Hexagon Purus in areas of mutual interest and benefit and as previously stated, retain a significant ownership stake.”

Trading update

Hexagon Purus continues to have a strong and diversified portfolio of long-term agreements across several applications supporting the Company’s medium and long-term targets and is progressing with its ongoing capacity expansion program. The Company’s order backlog as of the end of November 2023 has increased to approximately NOK 1.3 billion, whereof approximately NOK 1.1 billion is for execution in 2024. For the full-year 2023, the Company is currently expecting revenue growth of approximately 40% year-over-year, affected by a somewhat delayed ramp-up of the new hydrogen cylinder production facility in Kassel. Negative EBITDA for full-year 2023 is expected to widen by approximately 10% compared to full-year 2022 EBITDA, but relative EBITDA margin for full-year 2023 is expected to significantly improve year-over-year.

Summary of key terms of the Convertible Bond Private Placement

Hexagon Purus is contemplating a Convertible Bond Private Placement convertible into new shares of the Company (the “Conversion Shares”) for a nominal amount of up to NOK 999,950,000. The Convertible Bonds are expected to mature in 5 years from issuance (i.e. in 2029) and are expected to bear interest at a fixed rate of 10%, payable semi-annually in kind (i.e. through the issuance of additional Convertible Bonds). The conversion price is expected to be set at a 25% premium to the volume-weighted average share price of the Company (the “VWAP”) on the Oslo Stock Exchange of the 45 trading days up to and including today (the “Conversion Price”). The settlement of the Convertible Bonds is expected to take place on or around 1 February 2024 (the “Issue Date”) and is conditional on an extraordinary general meeting (the “EGM”) of the Company expected to be held on or about 11 January 2024 resolving to approve the issuance of the Convertible Bonds. Mitsui and Hexagon Composites have committed to vote in favour of the resolution at the EGM.

The subscribers of the Convertible Bonds will receive 270,000,000 non-transferrable Warrants (the “Warrants”) and 14,000,000 non-transferrable additional Warrants (the “Additional Warrants”). The Warrants and Additional Warrants will be allocated pro-rata among the subscribers of the Convertible Bonds based on their respective allocations. The issuance of the Warrants and Additional Warrants is subject to approval by the EGM.

The Warrants provide rights to subscribe for, in any future equity financing round, common shares in the Company at the price determined by the Company in such equity financing, limited to the subscription amount for the Convertible Bonds initially allocated to such warrant holder. The Additional Warrants provide rights to subscribe, in any future equity financing round common shares in the Company limited to 5% of the number of shares allocated to the warrant holder in any such equity financing round, with an exercise price equal to the par value of the Hexagon Purus share (currently NOK 0.1). All Warrants will expire on the date falling five years after the date of the EGM.

The Company may redeem all, but not only some, of the outstanding Convertible Bonds from and including the date falling 36 months after the Issue Date, at a price equal to 112% of the nominal amount for each redeemed Convertible Bond (provided that the daily VWAP on each of at least 30 consecutive trading days ending not earlier than the trading day prior to the date of the Call Option notice, has exceeded 300% of the Conversion Price).

The Convertible Bonds can be converted into new shares of the Company at any time from the Issue Date until the date falling 5 years after the date of the EGM at each convertible bondholder’s sole discretion.

The Convertible Bond Private Placement will be directed primarily towards selected Norwegian and international existing shareholders and convertible bond holders of the Company (a) outside the United States in reliance on Regulation S under the U.S, Securities Act of 1933, as amended (the "U.S. Securities Act") and (b) to investors in the United States who are "qualified institutional buyers" ("QIBs") as defined in Rule 144A under the U.S. Securities Act, in each case subject to an exemption being available from prospectus requirements and any other filing or registration requirements in the applicable jurisdictions and subject to other selling restrictions. The minimum application amount has been set to NOK 5,000,000. The Company may, however, at its sole discretion, allocate an amount below said threshold to the extent applicable exemptions from the prospectus requirements pursuant to the Norwegian Securities Trading Act and ancillary regulations are available. Investors with long investment horizon and investors who have supported the company over time will be prioritized in the allocation process. Further selling restrictions and transaction terms will apply.

Mitsui has agreed to a 2-year lock-up on its Bonds (i.e. a transfer restriction, not a conversion restriction). Furthermore, Mitsui has agreed to a 180-day lock-up for shares received upon conversion prior to 3 years from the Issue Date of the Bonds, and a 90-day lock-up for shares received upon conversion after 3 years from the Issue Date of the Bonds. Hexagon Composites has committed to a lock-up of 90 days on its shares in Hexagon Purus. The Company has agreed to a lock-up of 90 days, subject to customary exceptions.

Equal treatment of shareholders

The Company has carefully considered the issue of Convertible Bonds in light of the equal treatment obligations under the Norwegian Public Limited Liability Companies Act, the Norwegian Securities Trading Act, the rules on equal treatment under Rule Book II for Oslo Børs and the Oslo Stock Exchange’s Guidelines on the rule of equal treatment. The Company has evaluated various forms of financing alternatives over a substantial period of time, with the joint interests of the shareholder community in mind. It is of the opinion that the deviation from the preferential rights inherent in carrying out the Convertible Bond Private Placement in the manner proposed is firmly in the common interest of the shareholders of the Company.

Advisors

ABG Sundal Collier ASA (“ABGSC”) and BNP PARIBAS (“BNP Paribas”) are acting as joint global coordinators, joint bookrunners and financial advisors in the Convertible Bond Private Placement (the “Joint Global Coordinators”). Please note that BNP Paribas will not take part in any marketing activity with US investors. Any such discussions as well as any placing in the US will be done exclusively by ABGSC without any involvement or liability from BNP Paribas.

Advokatfirmaet Schjødt AS is acting as legal advisor to the Company.

Advokatfirmaet Thommessen AS is acting as legal advisor to the Joint Global Coordinators.

This information is considered to be inside information pursuant to the EU Market Abuse Regulation and was published by Eli Turander, Global Communication Director, on 20 December 2023 at 16:31 (CET).

For further information:

Salman Alam, CFO, Hexagon Purus

Telephone: +47 476 12 713 | salman.alam@hexagonpurus.com

Mathias Meidell, Director Investor Relations, Hexagon Purus

Telephone: +47 909 82 242 | mathias.meidell@hexagonpurus.com

Eli Turander, Global Communication Director, Hexagon Purus

Telephone: +47 953 35 795 | eli.turander@hexagonpurus.com

Hy24: Elizabeth Adams, Senior Managing Director, FTI Consulting

hy24@fticonsulting.com

About Hexagon Purus

Hexagon Purus enables zero emission mobility for a cleaner energy future. The company is a world leading provider of hydrogen Type 4 high-pressure cylinders and systems, battery systems and vehicle integration solutions for fuel cell electric and battery electric vehicles. Hexagon Purus' products are used in a variety of applications including light, medium and heavy-duty vehicles, buses, ground storage, distribution, refueling, maritime, rail and aerospace.

Learn more at www.hexagonpurus.com and follow @HexagonPurus on X and LinkedIn.

About Mitsui & Co., Ltd.

Mitsui & Co., Ltd. (8031: JP) is a global trading and investment company with a diversified business portfolio that spans 63 countries in Asia, Europe, North, Central & South America, The Middle East, Africa and Oceania.

Mitsui has about 5,500 employees and deploys talent around the globe to identify, develop, and grow businesses in collaboration with a global network of trusted partners. Mitsui has built a strong and diverse core business portfolio covering the Mineral and Metal Resources, Energy, Machinery and Infrastructure, and Chemicals industries.

Leveraging its strengths, Mitsui has further diversified beyond its core profit pillars to create multifaceted value in new areas, including innovative Energy Solutions, Healthcare & Nutrition and through a strategic focus on high-growth Asian markets. This strategy aims to derive growth opportunities by harnessing some of the world’s main mega-trends: sustainability, health & wellness, digitalization and the growing power of the consumer.

Mitsui has a long heritage in Asia, where it has established a diverse and strategic portfolio of businesses and partners that gives it a strong differentiating edge, provides exceptional access for all global partners to the world’s fastest growing region and strengthens its international portfolio.

For more information on Mitsui & Co’s businesses visit, www.mitsui.com.

About Hy24

Hy24 is the world’s largest clean hydrogen alternative investment fund manager which is fully dedicated to scaling up the global hydrogen economy. Hy24 is investing in large-scale, strategic, clean hydrogen projects and technologies that will unlock the sector’s full potential. Clean hydrogen will be critical in meeting net zero targets along with renewables and electrification.

Created in 2021, Hy24 is a 50/50 joint venture between Ardian, a world leading private investment house ($160bn of Assets Under Management), and FiveT Hydrogen, a clean hydrogen investment platform launched by former hydrogen executives. Alongside the Equipment Fund, Hy24 is currently deploying a €2 billion Clean Hydrogen Infrastructure Fund (Infra Fund) dedicated to the infrastructure scale-up which attracted investments from over fifty leading world-class industrial and institutional investors.

Hy24’s Funds are Article 9 compliant per Europe’s Sustainable Finance Disclosure Regulation (SFDR). Hy24 is regulated by the Autorité des marchés financiers. The fund manager is based in Paris and has team of over 30 collaborators and partners in Zurich, Singapore, and New York.

Lean more on https://www.hy24partners.com/ and on LinkedIn.

About Hexagon Composites ASA

Hexagon Composites delivers safe and innovative solutions for a cleaner energy future. Hexagon Composites solutions enable storage, transportation and conversion to clean energy in a wide range of mobility, industrial and consumer applications.

Learn more at www.hexagongroup.com and follow @HexagonASA on X and LinkedIn.

Important Notices

This announcement is not and does not form a part of any offer to sell, or a solicitation of an offer to purchase, any securities of the Company. The distribution of this announcement and other information may be restricted by law in certain jurisdictions. Copies of this announcement are not being made and may not be distributed or sent into any jurisdiction in which such distribution would be unlawful or would require registration or other measures. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.

The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and accordingly may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and in accordance with applicable U.S. state securities laws. The Company does not intend to register any part of the offering or their securities in the United States or to conduct a public offering of securities in the United States. Any sale in the United States of the securities mentioned in this announcement will be made solely to "qualified institutional buyers" as defined in Rule 144A under the Securities Act.

In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The expression "Prospectus Regulation" means Regulation 2017/1129 as amended together with any applicable implementing measures in any Member State.

This communication is only being distributed to and is only directed at persons in the United Kingdom that are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or (ii) high net worth entities, and other persons to whom this announcement may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only for relevant persons and will be engaged in only with relevant persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.

Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "strategy", "intends", "estimate", "will", "may", "continue", "should" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The Company does not provide any guarantees that the assumptions underlying the forward-looking statements in this announcement are free from errors nor does it accept any responsibility for the future accuracy of the opinions expressed in this announcement or any obligation to update or revise the statements in this announcement to reflect subsequent events. You should not place undue reliance on the forward-looking statements in this document.

The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice. The Company does not undertake any obligation to review, update, confirm, or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this announcement.

None of the Joint Global Coordinators nor any of their respective affiliates make any representation as to the accuracy or completeness of this announcement and none of them accept any responsibility for the contents of this announcement or any matters referred to herein.

This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities in the Company. Neither the Joint Global Coordinators nor any of their respective affiliates accept any liability arising from the use of this announcement.

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