Storytel announces its intention to carry out a directed share issue through an accelerated book building process

STOCKHOLM, Nov. 9, 2022 /PRNewswire/ -- Storytel AB (publ) ("Storytel" or the "Company") hereby announces its intention, with deviation from the shareholders' preferential rights, to carry out a directed issue of class B shares, corresponding to approximately SEK 400 million through an accelerated book building process (the "Directed Issue"). The Directed Issue will be directed to Swedish and international institutional investors. Storytel has engaged ABG Sundal Collier AB and Swedbank AB (publ) to explore the conditions for completing the Directed Issue through an accelerated bookbuilding procedure to be commenced immediately. Storytel's two largest shareholders, EQT Public Value Investment Sàrl ("EQT") and Roxette Photo NV ("Roxette"), as well as the Finnish strategic investor Otava Ltd. ("Otava"), have indicated that they intend to subscribe for significant amounts in the transaction. The proceeds from the Directed Issue are intended to be used to partially repay a bridge loan facility provided by Swedbank AB (publ) and to 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. Swedbank AB (publ) has offered to refinance SEK 200 million of the outstanding bridge loan facility with a term loan of the same amount.

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The Directed Issue

Storytel has, partly based on the authorization given by Storytel's Annual General Meeting on May 4, 2022 ("Tranche 1") and partly subject to subsequent approval by an Extraordinary General Meeting ("Tranche 2"), engaged ABG Sundal Collier AB and Swedbank AB (publ) to investigate the possibilities to conduct a directed issue, with deviation from the shareholders' preferential rights, corresponding to approximately SEK 400 million directed to Swedish and international institutional investors through an accelerated book building process. The book building process will commence immediately and will end before trading on Nasdaq First North Growth Market commences on 10 November 2022. The Board of Directors may decide to extend or shorten the application period and can at any moment decide to terminate the book building process and thus refrain from conducting the Directed Issue.

The Company intends to use the net proceeds from the Directed Issue, inter alia, to 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.

Subject to the completion of the Directed Issue, Storytel's two largest shareholders, EQT and Roxette, as well as Otava, have indicated that they intend to subscribe for significant amounts in the transaction. The part of the Directed Issue subscribed for by EQT, Roxette and Otava will, to some extent, not be able to be subscribed within Tranche 1 and will instead be decided within the framework of Tranche 2, which is subject to approval by an Extraordinary General Meeting, which will be convened in connection with the announcement of the results of the Directed Issue. The Board of Director's decision on Tranche 1 is independent of whether or not a decision on Tranche 2 is made.

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 without the implementation of a rights issue with deviation from the shareholders' preferential rights. 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 issue. In addition, given the market volatility that has been observed in 2022, and which is still ongoing, the Board of Directors has assessed that a rights issue would also require significant underwriting commitments from a underwriting syndicate, 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 is expected to broaden the shareholder base and provide 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 overall 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 will be determined through a bookbuilding process with institutional investors, it is the Board of Director's assessment that the subscription price will reflect current market conditions and demand and will therefore be in line with market conditions.

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 is legal advisor to the Company and Baker & McKenzie Advokatbyrå KB is legal advisor to the Joint Bookrunners.

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 of the Directed Issue. Members of the Company's Board of Directors and management, have, subject to customary exceptions, agreed to not sell their shares in the Company for a period of 90 days after the date of registration of the shares issued in connection with the Directed Issue with the Swedish Companies Registration Office.

This information constitute inside information as Storytel AB (publ) is obliged to disclose under the EU Market Abuse Regulation 596/2014. The information was 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.

IMPORTANT INFORMATION

The release, announcement or distribution of this press release may, in certain jurisdictions, be subject to restrictions and the recipients of this press release in jurisdictions where this press release has been published or distributed shall inform themselves of and follow such legal restrictions. The recipient of this press release is responsible for using this press release, and the information contained herein, in accordance with applicable rules in each jurisdiction. This press release does not constitute an offer, or a solicitation of any offer, to buy or subscribe for any securities in Storytel in any jurisdiction, neither from Storytel nor from someone else.

This press release does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein may not be sold in the United States absent registration or an exemption from registration under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There is no intention to register any securities referred to herein in the United States or to make a public offering of the securities in the United States. The information in this press release may not be announced, published, copied, reproduced or distributed, directly or indirectly, in whole or in part, within or into the United States, Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, South Africa, Switzerland or in any other jurisdiction where such announcement, publication or distribution of the information would not comply with applicable laws and regulations or where such actions are subject to legal restrictions or would require additional registration or other measures than what is required under Swedish law. Actions taken in violation of this instruction may constitute a crime against applicable securities laws and regulations.

This press release is not a prospectus for the purposes of Regulation (EU) 2017/1129 (the "Prospectus Regulation") and has not been approved by any regulatory authority in any jurisdiction. Storytel has not authorized any offer to the public of shares or other securities in any member state of the EEA and no prospectus has been or will be prepared in connection with the Directed Issue. 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.

In the United Kingdom, this press release and any other materials in relation to the securities described herein is only being distributed to, and is only directed at, and any investment or investment activity to which this document relates is available only to, and will be engaged in only with, "qualified investors" (within the meaning of the United Kingdom version of the EU Prospectus Regulation (2017/1129/ EU) which is part of United Kingdom law by virtue of the European Union (Withdrawal) Act 2018) who are (i) persons having professional experience in matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). In the United Kingdom, any investment or investment activity to which this communication relates is available only to, and will be engaged in only with, relevant persons. Persons who are not relevant persons should not take any action on the basis of this press release and should not act or rely on it.

This press release does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the new shares. Any investment decision to acquire or subscribe for shares in connection with the Directed Issue must be made on the basis of all publicly available information relating to the Company and the Company's shares. Such information has not been independently verified by the Joint Bookrunners. The Joint Bookrunners is acting for the Company in connection with the transaction and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to its clients nor for giving advice in relation to the transaction or any other matter referred to herein.

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