15. febrúar 2023

SKEL signs new purchase agreement for the sale of all SKEL shares in Sp/f Orkufelagið

On October 25, 2022, it was announced that SKEL fjárfestingafélag hf. ("SKEL") had accepted an Offer Letter from the Faroese company SP/f from June 27, 2007 ("CIG") for all owned shares in SP/F Orkufelagið, or 48.3% of issued shares. Orkufelagið is the holding company for P/F Magn, which is an energy, trade and oil distribution company in the Faroe Islands. Parallel to SKEL's acceptance of CIG's offer, Hólmi ehf. ("Hólmi") accepted the sale of its shares, which would have made CIG the majority owner in SP/F Orkufelagið.

A share purchase agreement between SKEL and Hólmi as sellers, and CIG as buyer, was signed on 20 December. The share purchase agreement was subject to the same conditions as the Offer Letter. The buyer and seller agree that due diligence has been concluded and financial terms of the sale have been met.

One shareholder, which holds 0.4% of Orkufélagið shares, has raised objections to sale process. SKEL does not consider the shareholder's objections to have any merit.

Given the fact that P/F Magn is an important infrastructure company in the Faroe Islands, the parties considered it important that there was a broad agreement between shareholders on company operations and the sales process in whole. The long-stop date according to the purchase agreement lapsed on 14 February 2023.

As a result, SKEL and CIG entered into a new purchase agreement today, which is mostly unconditional, where CIG agrees to purchase all SKEL shares in SP/F Orkufélagið. Hólmi has withdrawn from a proposed sale of shares. Pursuant the agreement CIG will buy shares amounting to 48.23% of the total issued share capital in the Company. At the buyer’s request, SKEL will offer other shareholders in SP/F Orkufélagið the opportunity to exercise right of first refusal in relation to the sale shares in equal proportions, despite SKEL being exempt from the provisions on pre-emptive rights under the shareholders agreement. CIG has in turn agreed to purchase what remains of the sale shares, following the pre-emption round.

The purchase price of the shares will be in accordance with the previous agreement, DKK 146,054,899. The parties estimate that the buyer will issue payment in cash and the shares delivered by the end of March 2023.

Subject to the execution of the purchase agreement, SKEL has entered into a Put-Option Agreement with Hólmi, a 7.9% shareholder in Orkufelagið. The execution period of the option shall be 30 days following the approval of Orkufelagið annual accounts for 2023. The goal of this agreement is to guarantee Hólmi will not incur loss because it withdrew from the purchase agreement. The Put-Option share price shall be in accordance with the CIG and SKEL purchase agreement, with 5% interest.