Shareholders Rights Issue & LCC Pakistan Acquisition by TalkPool - LCC Pakistan- A Talkpool Company

TalkPool’s board of directors has, subject to approval by the Annual General Meeting of 21 June 2017, resolved to issue a new share issue with preferential rights for existing shareholders (“Rights Issue") of approximately SEK 32.9 million before issue costs. The proceeds will be used to part-finance the acquisition of LCC Pakistan (Pvt) Ltd.

TalkPool AG (“TalkPool") announced today (see press release announced at 08:30 CET) the acquisition of 100% of the shares in LLC Pakistan (Pvt) Ltd (“LCC PAK"). LCC PAK was founded 2008 in Pakistan and is owned by LCC Middle East FZ LLC. LCC PAK, like TalkPool, focuses on network service delivery. Through the acquisition, TalkPool becomes the leading provider of network services in Pakistan and gains a strong hub in the Middle East. LCC PAK has a long history of good stability and high profitability. The company clocked up revenues of approximately EUR 10 million in 2016 with approximately 1,000 employees.

TalkPool has a good understanding of LCC PAK as Stan Schreuder, member of the TalkPool board of directors since 2016, worked for Lightbridge Communications Corporation (LCC) in the period 2002 to 2015. In order to finance the acquisition, TalkPool’s board of directors has decided to carry out a rights issue of approximately SEK 32.9 million, which is 81 percent guaranteed, and a directed issue of convertible debentures of approximately SEK 4.6 million.

The rights issue in the summary and preliminary timetable

• Shareholders in TalkPool have the right to subscribe for one (1) new share for two (2) existing shares.
• Each new share has the same rights as existing shares in the company.
• The subscription price in the Rights Issue is SEK 22 per share.
• Upon full subscription of the Rights Issue, TalkPool will provide approximately SEK 32.9 million before issue costs.
• Reconciliation date for the right to participate in the Rights Issue is August 11, 2017.
• Subscription period for the Rights Issue is August 14 – August 28, 2017.
• The rights issue is guaranteed to 81 percent through subscriptions and guarantees. However, the Company has not requested or obtained bank or other collateral for these.
• The Rights Issue requires the approval of an Annual General Meeting (AGM) which will be held on Wednesday, 21 June 2017. The Rights Issue is also conditional upon the AGM decision to amend the Articles of Association in accordance with the board of director’s proposal.
• Shareholders who do not want or cannot participate in the Rights Issue, may sell their subscription rights until August 24th. In the event that not all new shares are subscribed for with preferential rights, the board of directors shall decide, within the limits of the maximum amount of the issue, to distribute the shares that are not subscribed for with preferential rights.

Conditions for the Rights Issue
TalkPool’s share capital amounts to 149 611.10 SFr before the Rights Issue, and the number of shares amount to 2,992,222. The nominal value of the shares is 0.05 Sfr. The new share issue refers to a maximum of 1,496,111 shares. In addition, the board of directors will have a so-called over-allotment option to issue additional 227,273 shares upon transfer of the Rights Issue, which may increase the issue amount by up to 5.0 MSEK.
In total, TalkPool can thus issue up to 1,723,384 shares, given that the Rights Issue is fully subscribed and the over-allot option is fully utilized. This would mean that the share capital increase by 86,169.1864 Sfr to 235,780.2864 SFr and the total number of shares increased to 4,715,606.
Two (2) existing shares in the Company entitle to one (1) new share. The subscription price per share is 22 kr.

Guarantees
The rights issue is guaranteed to 81 percent through subscription undertakings of approximately SEK 17.8 million and guarantees amounting to SEK 9.0 million. The guarantee fee is 10.0 percent of the guaranteed amount and thus amounts to SEK 0.9 million.

The guarantee fee will be paid in cash. The company has not requested or obtained bank guarantees or other collateral for these. Further information regarding the parties that have entered into subscriptions and guarantee commitments will be found in the prospectus that is expected to be published on 9 August in accordance with the above preliminary timetable.

Terms for the issue of convertible debentures
The issue of convertible debentures amounts to SEK 4.6 m. The convertible debenture will have an annual interest rate of 6 percent and a redemption price of SEK 36. The maturity is three years. Redemption of shares will be possible for a certain period during the first two years of the maturity of the debt instrument.
On the assumption of redemption, the number of shares will increase by 127,777, while the share capital will increase by SF 6,388.85.
The issue of convertible debentures is subject to approval by the AGM, which will be held on Wednesday, June 21, 2017. The issue is conditional upon the AGM also making a decision to amend the Articles of Association in accordance with the Board’s proposal.

AGM
The board of directors’ decision on the Rights Issue and related decisions is subject to approval by the Annual General Meeting, which will take place on Wednesday, June 21, 2017, in Chur, Switzerland.
At the Annual General Meeting, the Board of director’s decision and proposal for a decision as set out below will be presented for approval.
(I) a new issue of no more than 1,496,111 shares in respect of new shares with preferential rights for the shareholders;
(Ii) a new issue of no more than 227,273 shares in respect of such an overdraft option;
(Iii) new issue of convertible debentures corresponding to 127,777 shares upon redemption;
(Iv) authorization to issue shares, convertible debentures, and warrants with the purpose of preparing for any future acquisitions.

Advisors
G & W Fondkommission acts as financial advisor and Setterwalls Advokatbyrå AB acts as legal adviser to TalkPool in connection with the Rights Issue and the issue of convertible debentures.

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