RB 31/2018
Date: 2018-05-08
Subcject: Commencement of the private placement of ordinary bearer series F shares in the Company and of the sale (further resale) of the Company’s treasury shares and entering into the placement agreement
Legal basis: Article 17, paragraph 1 of MAR - confidential information

Not for release, publication or distribution directly or indirectly, in or into the United States of America, Australia, Canada or Japan or in any other jurisdiction where to do so would be restricted or prohibited by law.

Further to current reports No. 15/2018 and No. 16/2018 of 22 March 2018, No. 22/2018 of 3 April 2018 and No. 28/2018 of 20 April 2018, the Management Board of Benefit Systems S.A. with its registered office in Warsaw (the “Company”, the “Issuer”) hereby informs that on 8 May 2018 a decision was made to take actions aimed at: (i) increasing the share capital of the Company through the issuance of 184,000 (one hundred eighty four thousand) ordinary bearer series F shares in the Company (the “Series F Shares”), while depriving the Company’s current shareholders of their pre-emptive subscription rights with respect thereto; and (ii) selling (further reselling) 100,000 (one hundred thousand) treasury shares of the Company (the “Treasury Shares”).

The decision that the Company take such action was made further to the resolutions of the Extraordinary General Meeting of the Company adopted on 20 April 2018: 1) on the increase in the share capital of the Company by way of issuing ordinary bearer Series F shares, on entirely depriving the existing shareholders of their pre-emptive subscription rights with respect to all Series F shares, on amendments to the Articles of Association of the Company and seeking of admission to trading and the introduction of the Series F shares and the rights to Series F shares to trading on the regulated market operated by the Warsaw Stock Exchange (Giełda Papierów Wartościowych w Warszawie S.A.), as well as on the dematerialization of the Series F shares and the rights to the Series F shares (the “Resolution on the Issue of Series F Shares”) and 2) on the authorization granted to the Management Board of the Company to sell (further resell) the Company’s treasury shares (the “Treasury Shares Resale Resolution”) (collectively, the “Resolutions”).

The Company will effect the issue of the Series F Shares through a private placement within the meaning of Article 431 § 2 Clause 1 of the Commercial Companies Code, addressed exclusively to selected investors, while the sale (further resale) of the Treasury Shares will be effected by making an offer for the purchase of the Treasury Shares, also addressed exclusively to selected investors.

Pursuant to the Company’s decision, the issuance of the Series F Shares and the sale of the Treasury Shares (the “Offering”) will be effected in the form of: (i) a public offering within the meaning of Article 3 Section 1 of the Act of 29 July 2005 on Public Offering, the Conditions for Introducing Financial Instruments to an Organized Trading System, and Public Companies (the “Public Offering Act”), for which no prospectus or other offering document is required, addressed to professional clients within the meaning of the Act of 29 July 2005 on Trading in Financial Instruments (the “Act on Trading”) and to investors who, subject to the terms set forth in the Resolutions, will acquire the Series F Shares or the Treasury Shares with a value (as calculated based on the issue price or the sale price, respectively, as at the day of setting such price) of at least EUR 100,000.00 (one hundred thousand euro) (calculated separately for the Series F Shares and the Treasury Shares), in Poland, and (ii) a private placement addressed to: (a) qualified institutional buyers in the United States of America in a private placement under Section 4(a)(2) under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) and pursuant to other exemptions from the registration requirements stipulated by the U.S. Securities Act, as well as (b) institutional investors outside the United States of America in accordance with Regulation S under the U.S. Securities Act.

Furthermore, the Management Board of the Company informs that the Offering will be commenced immediately following the publication of this current report and will be conducted through a book-building process among the Eligible Investors, within the meaning and subject to the terms set forth in the Resolution on the Issue of Series F Shares or the Treasury Shares Resale Resolution, respectively, and the Placement Agreement (as defined below).

The Series F Shares and the Treasury Shares will first be offered to those of the Eligible Investors invited to participate in the book-building process for the Series F Shares or the Treasury Shares who were the Company’s shareholders as at the end of 20 April 2018 (the “Preference Day”), and at that time held Company shares carrying the right to exercise at least 0.5% of the total number of votes in the Company, and also meet the remaining conditions stipulated by the Resolutions, which include presenting, during the book-building process, a document confirming that a given entity was the Company’s shareholder on the Preference Day (the “Eligible Investors”).

In order for the Eligible Investors to participate in the private placement of the Series F Shares and the sale of the Treasury Shares on preferred terms, the Eligible Investors shall submit by 12:00 PM (noon) CET on 10 May 2018, a document confirming that the given Eligible Investor was a shareholder of the Company on the Preference Day (a document in the form of “information on the securities account balance” should at least provide the information on the identification of the shareholder and the number of shares of the Company held by the shareholder as at the end of day on 20 April 2018), to the following address: WAWSecMiddleOffice@pekaoib.pl or Syndicate@wood.com, in case of investors from all the jurisdictions apart from Canada, or to the following address: ir@benefitsystems.pl, in case of investors from Canada.

In respect of the Series F Shares, Eligible Investors Entitled to the Preferential Allocation, as defined in the Resolution on the Issue of Series F Shares, will have preference to subscribe for Series F Shares, that is, provided that the maximum number of Series F Shares authorized pursuant to the Resolution on the Issue of the Series F Shares is issued, every 14 (fourteen) shares held by an Eligible Investors Entitled to the Preferential Allocation will carry the right to subscribe for 1 (one) Series F Share.

In respect of the Treasury Shares, Eligible Investors Entitled to the Preferential Allocation, as defined in the Treasury Shares Resale Resolution, will have preference to acquire Treasury Shares, that is, provided that the maximum number of Treasury Shares authorized pursuant to the Treasury Shares Resale Resolution is sold, every 26 (twenty six) shares held by an Eligible Investors Entitled to the Preferential Allocation will carry the right to acquire 1 (one) Treasury Share.

The ultimate numbers of the Series F Shares and the Treasury Shares to be offered for subscription or acquisition, as the case may be, by the Eligible Investors and the issue price of the Series F Shares and the sale price of the Treasury Shares will be determined by the Management Board of the Company upon the completion of the book-building process, depending on the level of investor interest in the subscription for the Series F Shares and the acquisition of the Treasury Shares.

The Series F Shares and the Treasury Shares will be ultimately offered to such Eligible Investors who will be indicated in a resolution of the Management Board adopted upon the completion of the book-building process.

The sale of the Treasury Shares by the Company is expected to take place on 15 May 2018, by execution of block trades (under the book-building process).

Subscription agreements for the Series F Shares are expected to be executed by 16 May 2018, and cash payments for the Series F Shares are expected to be made within the deadline and to the subscription account of the Offering Agent (as defined below) indicated in the subscription agreements for the Series F Shares.

Furthermore, on 8 May 2018 the Company entered into a conditional placement agreement for the Series F Shares and the Treasury Shares with Pekao Investment Banking S.A. (“Pekao IB”; the “Offering Agent”) and Wood & Company Financial Services, a.s. Spółka Akcyjna, Oddział w Polsce (“Wood”) (Pekao IB and Wood are collectively hereinafter referred to as the “Managers”) (the “Placement Agreement”).

Pursuant to the Placement Agreement, the Managers agreed to provide services for the purpose of the placement of the Series F Shares and the Treasury Shares on the terms set out in that agreement, and in particular to use their best efforts to solicit potential investors and solicit the subscriptions and acquisition, and payment for the shares by such investors. However, the Managers are under no obligation to guarantee the success of the issue of the Series F Shares or the sale of the Treasury Shares. The Placement Agreement contains standard conditions for Managers’ undertakings encountered in such agreements entered into in connection with transactions similar to the Series F Shares offering and the Treasury Shares offering, including conditions related to force majeure and the occurrence of a material adverse change in the Company’s situation. The Placement Agreement also contains representations and warranties concerning the Issuer, its capital group and their operations, within the standard scope of such representations and warranties made by the issuers of securities in such agreements related to transactions similar to the Series F Shares offering and the Treasury Shares offering. The Placement Agreement may be terminated on the terms specified therein, including in the event of failure of entering into the pricing supplement to the Placement Agreement, in which the parties to the Placement Agreement will agree, inter alia, the issue price of Series F Shares and the sale price of Treasury Shares. The Placement Agreement is governed by the laws of the Republic of Poland and subject to jurisdiction of Polish courts. The Placement Agreement stipulates that the Managers and other persons named in the Placement Agreement shall be indemnified and held harmless against certain claims, liabilities or costs that might be sought from or raised against the Managers or other designated persons in connection with the Placement Agreement (indemnity clause).

Subject to customary exemptions and certain other exemptions agreed between the Issuer and the Managers, the Issuer has agreed under the Placement Agreement not to issue, sell or offer shares for a period from the date of execution of the Placement Agreement until the earlier of: (i) the lapse of 180 days following the initial listing date of the rights to the Series F Shares, or the (ii) lapse of 210 days following the execution of the Placement Agreement (the “Lock-up Restriction). The Lock-up Restriction ceases to apply in the event of termination of the Placement Agreement on the terms specified therein, including in case of the failure of entering into the pricing supplement to the Placement Agreement.

Additionally, the Company has learnt that on 8 May 2018 Mr. James Van Bergh and Benefit Invest Ltd. (the “Key Shareholders”), subject to customary exemptions and certain other exemptions agreed between each of the Key Shareholders and the Managers, agreed not to sell or offer without the consent of the Managers any shares (the “Key Shareholders’ Lock-up Restriction) for a period from the date of execution of the agreement concerning the Key Shareholders’ Lock-up Restriction until the earlier of: (i) the lapse of 180 days following the initial listing day of the rights to Series F Shares or (ii) the lapse of 210 days following the execution of the agreement concerning the Key Shareholders’ Lock-up Restriction. The Key Shareholders’ Lock-up Restriction ceases to apply in the event of termination of the Placement Agreement on the terms specified therein, including in case of the failure of entering into the pricing supplement to the Placement Agreement or if all the Series F Shares and the Treasury Shares subject to the Offering have not been registered on the securities accounts of the investors or the Managers’ accounts acting on behalf of the investors by the end of June, 2018.The Issuer will seek to have the Series F Shares, and, subject to satisfaction of the regulatory requirements for such admission and introduction also to have rights to the Series F Shares, admitted and introduced to trading on the regulated market operated by the Warsaw Stock Exchange (the “Admission”). For the purpose of the Offering and the Admission, the disclosure to the public of a prospectus or an information memorandum is not required and the Issuer is not carrying out and will not carry out any promotional activities in respect of the Offering.

Disclaimer:

This current report was prepared in accordance with Article 17 Section 1 of Regulation No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC.

This current report is solely for information purposes and is published by the Company exclusively in order to provide essential information on the execution of the Placement Agreement by Benefit Systems S.A., Pekao Investment Banking S.A. and WOOD & Company Financial Services, a.s. Spółka Akcyjna, Oddział w Warszawie and the commencement of the private placement of ordinary bearer series F shares in the Company, and the sale (further resale) of the Company’s treasury shares. This current report is by no means intended, whether directly or indirectly, to promote the subscription of the new shares or sale of the treasury shares of the Issuer and does not represent promotional material prepared or published by the Company for the purpose of promoting the new shares or their subscription or the sale of the treasury shares of the Issuer for the purpose of encouraging an investor, whether directly or indirectly, to acquire the treasury shares or subscribe for the new shares. The Company has not published any materials aimed at promoting the new shares or their subscription or sale of the treasury shares of the Issuer.

This material is not intended for distribution, whether directly or indirectly, within the territory of or in the United States of America or other jurisdictions where such distribution, publication or use may be subject to restrictions or may be prohibited by law. The securities referred to in this material have not been and will not be registered under the U.S. Securities Act of 1933, as amended and may only be offered or sold within the United States under an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

This current report is not, and under no circumstances is to be construed as, a prospectus, an offering memorandum, an advertisement or a public offering of the securities described herein in Canada or any province or territory thereof. No securities commission or similar regulatory authority in Canada has reviewed or in any way passed upon this current report, the information contained herein or the merits of the securities described herein and any representation to the contrary is an offence. Under no circumstances is this current report to be construed as an offer to sell securities or as a solicitation of an offer to buy securities in any jurisdiction of Canada. Any offer or sale of the securities described herein in Canada will be made in accordance with applicable Canadian law and under an exemption from the requirements to file a prospectus with the relevant Canadian securities regulators and only by a dealer registered under applicable securities laws or, alternatively, pursuant to an exemption from the dealer registration requirement in the relevant province or territory of Canada in which such offer or sale is made.