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GOMspace

GOMspace

GomSpace A/S: GomSpace signs EUR 18 million credit facility agreement with the European Investment Bank

17:50 / 25 November 2022 GOMspace Press release

Today, GomSpace A/S (a wholly-owned Danish subsidiary of GomSpace Group AB) has signed a finance contract through which the European Investment Bank (the "EIB"), upon certain conditions, makes available a venture debt facility of up to EUR 18 million to GomSpace A/S for a research and development project relating to an enlarged satellite platform, part of the product investment program announced by GomSpace earlier in 2022. If GomSpace utilizes the facility, the EIB will be entitled to a predetermined number of warrants in GomSpace Group AB for each tranche.

Today, GomSpace A/S (a wholly-owned Danish subsidiary of GomSpace Group AB) has signed a finance contract through which the EIB makes available a venture debt facility of up to EUR 18 million to co-finance up to 50 percent of a research and development project relating to an enlarged satellite platform (the "Investment"), part of the product investment program announced by GomSpace earlier in 2022. The total facility is split into three tranches of (A) EUR 5 million, (B) EUR 6 million, and (C) EUR 7 million, respectively. Each tranche may only be utilized in full, is subject to certain conditions (see more below) and has a maturity date of five (5) years, respectively. The EIB loan will be unsecured and benefit from guarantees provided by certain material group companies, including GomSpace Group AB. The innovation loan will support GomSpace's future revenue growth and margin improvement in the coming years, aligned with its vision to evolve towards a higher-margin portfolio.

If GomSpace A/S utilizes the facility, the EIB will be entitled to a predetermined number of warrants in GomSpace Group AB, in addition to interest on the loan amount. The warrants are divided into three (3) tranches (see more below) and assuming full drawdown under the facility, the EIB will be entitled to warrants in total corresponding to five (5) percent of the share capital and total number of shares and votes in GomSpace Group AB on a fully diluted basis (subject to potential recalculations in accordance with applicable terms and conditions for the warrants).

Based on the total share capital and the total number of shares and votes in GomSpace Group AB as of today, a maximum of 3,301,566 warrants may be issued under the credit facility. EIB will not pay any consideration for the warrants, and each warrant will entitle to subscription for one (1) new share in GomSpace Group AB (subject to applicable recalculation provisions) against payment of a subscription price corresponding to the quotient value of the company's shares (currently SEK 0.07) at the relevant time of exercise.

Hence, assuming full drawdown under the facility and exercise of all warrants, the share capital of GomSpace Group AB would increase with SEK 231,109.62 through the issuance of 3,301,566 new shares (based on today's quotient value of the shares and subject to potential recalculations in accordance with the terms and conditions applicable for the warrants). Pursuant to the terms and conditions of the warrants, subscription of new shares through the exercise of the warrants will be possible up to and including 31 December 2039. Subject to certain exceptions, GomSpace Group AB has a contractual right and, subject to restrictions pursuant to applicable law at the relevant time, a limited obligation to purchase all or part of the warrants back against payment of the fair market value of the aggregate number of new shares that the warrants entitle to subscription for, minus the subscription price for such new shares.     

All tranches are subject to the fulfilment of certain conditions including, without limitation, that GomSpace A/S has sufficient liquidity to pay its debts as they fall due for at least twelve (12) months from the disbursement date of the respective tranche, which may take into account the disbursement of the relevant tranche, that certain representations and warranties to be repeated in connection with each drawdown are correct in all respects, and the absence of an event of default or prepayment event under the finance contract. In addition, the respective tranche is - amongst other - subject to the conditions set forth below.

Drawdown of tranche A is conditioned upon that (i) GomSpace Group AB has issued and delivered warrants to the EIB entitling the EIB to 2.50 percent of the fully diluted share capital of GomSpace Group AB (i.e. 1,650,783 warrants based on the total number of shares in the company as of today), and (ii) that GomSpace Group AB has received an equity injection (e.g. by way of issuance of new shares) of at least EUR 4.8 million.

Drawdown of tranche B is conditioned upon (i) prior disbursement of tranche A, (ii) that GomSpace group's consolidated income in the twelve-month period preceding the disbursement is at least SEK 280 million, and (iii) that GomSpace has issued and delivered warrants to the EIB entitling to 1.75 percent of the fully diluted share capital of GomSpace Group AB (i.e. 1,155,548 warrants based on the total number of shares in the company as of today and in addition to the warrants to be issued and delivered as a condition precedent for tranche A).    

Drawdown of tranche C is conditioned upon (i) prior disbursement of tranche B, (ii) that GomSpace group's consolidated income in the twelve-month period preceding the disbursement is at least SEK 315 million, (iii) that GomSpace's consolidated gross profit in the twelve-month period preceding the disbursement is at least SEK 85 million, (iv) that an additional equity injection (e.g. by way of issuance of new shares) of at least EUR 8 million takes place, and (v) that GomSpace has issued and delivered warrants to the EIB entitling to 0.75 percent of the fully diluted share capital of GomSpace Group AB (i.e. 495,235 warrants based on the total number of shares in the company as of today and in addition to the warrants to be issued and delivered as a condition precedent for tranche A and B, respectively).

Each tranche has a maturity date of five (5) years, with no amortizations until maturity. The availability period of the facility is 24 months from signing of the finance contract. The interest rate p.a. is ten (10) percent for tranche A, eight (8) percent for tranche B and seven (7) percent for tranche C. From the date falling twelve (12) months from signing of the finance contract until the final availability date, a commitment fee at a rate of one (1) percent p.a. is payable by GomSpace in respect of the daily undrawn and uncancelled balance of the credit.

The finance contract contains customary obligations such as the provision of financial information (e.g. annual reports and quarterly reports), the provision of certain other information (e.g. information on any material changes to the Investment and material disputes), as well as other commitments, which among other things include an undertaking to use all amounts borrowed from the EIB to carry out the Investment, restrictions on disposals of assets, restrictions on acquisitions, restrictions on raising new debt, a negative clause regarding the provision of guarantees (with some exceptions), restrictions on distribution of dividends applicable for all group companies including GomSpace Group AB (as a general rule not permitted unless approved by the EIB), restrictions on granting loans, and a negative pledge regarding the provision of security arrangements (with some exceptions). The agreement also contains customary events of default including, without limitation, a right for EIB to demand immediate repayment if GomSpace A/S or other group companies breach the obligations under the agreement. Early prepayments are subject to a certain prepayment fee of 5-1 percent (decreasing over time) of the prepayment amount.

Comments from GomSpace and EIB, respectively

Niels Buus, CEO of GomSpace, commented: "The transaction is a step towards initiating the first phase of the strategy to create a modular capability to configure a range of In-Orbit Demonstration platforms to suit customers' different needs for applications (initially announced in the Q1, 2022 financial interim report); the "Product Investment Program".

EIB Vice President, Christian Thomsen, responsible for Denmark, commented: "EIB's commitment to supporting the space industry, where capital is needed to make a paradigm shift in innovation and technology for Europe, comes at a crucial point in time for this strategic sector. This is exactly where EIB is coming in, bridging a funding gap to support R&D in this dynamic sector at the right time, during different development phases for a company."

For more information, please contact:
Niels Buus (CEO, GomSpace)
Phone: +45 40 31 55 57
E-mail: nbu @gomspace.com
About GomSpace Group AB
The company's business operations are mainly conducted through the wholly-owned Danish subsidiary, GomSpace A/S, with operational office in Aalborg, Denmark. GomSpace is a space company with a mission to be engaged in the global market for space systems and services by introducing new products, i.e. components, platforms and systems based on innovation within professional nanosatellites. The company is listed on the Nasdaq First North Premier exchange under the ticker GOMX. FNCA Sweden AB is the company's Certified Adviser. For more information, please visit our website on www.gomspace.com.

Miscellaneous

This information is information that GomSpace is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, 17.50 p.m. CET on November 25, 2022.

About the European Investment Bank
The European Investment Bank (EIB) is the bank of the European Union, owned by the EU27 Member States. It is active in some 160 countries and is the world's largest multilateral lender for climate action projects, as well as a key financier of innovation, infrastructure and SME lending. The bank is providing long term financing to economically sustainable investments to contribute to the EU's political objectives. The EIB Group has set "ensuring a just transition for all" as one of the four overarching objectives in its Climate Bank Roadmap 2025. The EIB's ambition is to support EUR 1 trillion of climate action and environmental sustainability investments in the decade to 2030 and align all its new operations with the goals and principles of the Paris Agreement. For more information, please visit www.eib.org

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