INFORMATION MEMORANDUM in Connection with The
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INFORMATION MEMORANDUM in connection with the acquisition of all issued and outstanding shares in Midt-Norsk Havbruk AS by NTS ASA (A public limited liability company incorporated under the laws of Norway) __________ The information contained in this information memorandum (the “Information Memorandum”) relates to the acquisition of all issued and outstanding shares in Midt-Norsk Havbruk AS (the “Transaction”) by NTS ASA, a public limited liability company existing under the laws of Norway with business registration number 814520242 and listed on Oslo Børs with ticker “NTS” (the “Company”, and taken together with its subsidiaries, the “Group”). __________ This Information Memorandum serves as an information document pursuant to Section 3.5 of the Continuing Obligations for Stock Exchange Listed Companies (the “Continuing Obligations”). It also serves as a prospectus equivalent document for the purpose of listing the new shares to be issued in connection with the Transaction, cf. Section 7-5 no. 7 of the Norwegian Securities Trading Act. The Continuing Obligations apply in respect of companies with shares admitted to trading on Oslo Børs (the “Oslo Stock Exchange”) and this Information Memorandum has been submitted to the Oslo Stock Exchange for inspection before it was published. This Information Memorandum is not a prospectus and has neither been inspected nor approved by the Norwegian Financial Supervisory Authority (Nw. Finanstilsynet) in accordance with the rules that apply to prospectuses. __________ On 19 April 2017, the Company entered into a transaction agreement with the current shareholders of; Midt-Norsk Havbruk AS (the “Sellers”). The Company will acquire 100% of the shares in Midt-Norsk Havbruk AS (“MNH”) against issuance of new shares (“New Shares”) in the Company to the Sellers. The Transaction will be considered by the shareholders of the Company at an Extraordinary General Meeting to be held on or about 15 June 2017. __________ This Information Memorandum does not constitute an offer or solicitation to buy, subscribe or sell the securities described herein, and no securities are being offered or sold pursuant to this Information Memorandum. __________ In reviewing this Information Memorandum, you should carefully consider amongst other the matters described in Section 1 “Risk Factors” beginning on page 3. __________ The date of this Information Memorandum is 2 June 2017 i IMPORTANT INFORMATION For the definition of certain capitalised terms used throughout this Information Memorandum, please see section 12, “Definitions and Glossary”, which also applies to the front page. The information contained herein is current as of the date hereof and subject to change, completion and amendment without notice. The publication and distribution of this Information Memorandum shall not under any circumstances create any implication that there has been no change in the affairs of the Company or the Group or that the information herein is correct as of any date subsequent to the date of this Information Memorandum. No person is authorised to give information or to make any representation in connection with the Transaction other than as contained in this Information Memorandum. The contents of this Information Memorandum are not to be construed as legal, business or tax advice. Each reader of this Information Memorandum should consult with his or her own legal, business or tax advisor as to legal, business or tax advice. No due diligence has been made on the Company in connection with preparation of this Information Memorandum. Readers are expressly advised that the Shares are exposed to financial and legal risk and they should therefore read this Information Memorandum in its entirety, in particular section 1, “Risk Factors”. This Information Memorandum serves as an information document as required under section 3.5 of the Continuing Obligations. This Information Memorandum has been submitted to the Oslo Stock Exchange for inspection before it was published. It also serves as a prospectus equivalent document for the purpose of listing of the New Shares to be issued in connection with the Transaction, cf. section 7- 5 no. 5 of the Norwegian Securities Trading Act. This Information Memorandum is not a prospectus and has neither been inspected nor approved by the Norwegian Financial Supervisory Authority (Nw. Finanstilsynet) in accordance with the rules that apply to prospectuses. This Information Memorandum does not constitute an offer or solicitation to buy, subscribe or sell the securities described herein, and no securities are being offered or sold pursuant to this Information Memorandum. The distribution of this Information Memorandum may in certain jurisdictions be restricted by law. Persons in possession of this Information Memorandum are required to inform themselves about and to observe any such restrictions. No action has been taken or will be taken in any jurisdiction by the Company that would permit the possession or distribution of this Information Memorandum, in any country or jurisdiction where specific action for that purpose is required. This Information Memorandum shall be governed by and construed in accordance with Norwegian law. The courts of Norway, with Oslo District Court as legal venue, shall have exclusive jurisdiction to settle any dispute which may arise out of or in connection with this Information Memorandum. ii Table of Content 1 RISK FACTORS ................................................................................................................................. 2 2 RESPONSIBILITY STATEMENT ......................................................................................................... 8 3 PRESENTATION OF NTS ASA......................................................................................................... 10 4 THE TRANSACTION ....................................................................................................................... 23 5 PRESENTATION OF MIDT NORSK HAVBRUK AS .......................................................................... 31 6 THE GROUP FOLLOWING THE TRANSACTION ............................................................................. 35 7 INDUSTRY OVERVIEW .................................................................................................................. 36 8 SELECTED FINANCIALS OF NTS ASA ............................................................................................. 44 9 SELECTED FINANCIALS OF MIDT NORSK HAVBRUK AS ............................................................... 50 10 UNAUDITED PRO FORMA FINANCIAL INFORMATION ............................................................ 53 11 DEFINITIONS AND GLOSSARY OF TERMS ................................................................................. 60 12 ADDITONAL INFORMATION AND DOCUMENTS ...................................................................... 62 APPENDIX APPENDIX A – Auditor’s independent assurance report on pro forma financial information APPENDIX B – MNH’s financial statements 1 1 RISK FACTORS Investing in the Company involves inherent risks. Prospective investors should consider carefully, among other things, all of the information set forth in this Information Memorandum, and in particular, the specific risk factors set out below. An investment in the Company is suitable only for investors who understand the risk factors associated with this type of investment and who can afford a loss of all or part of the investment. If any of the risks described below materialize, individually or together with other circumstances, they may have a material adverse effect on the Group’s business, financial condition, results of operations and cash flow, which may cause a decline in the value and trading price of the shares in the Company that could result in a loss of all or part of any investment in the Shares. The order in which the individual risks are presented below is not intended to provide an indication of the likelihood of their occurrence nor of the severity or significance of individual risks. 1.1. Risks relating to the Group and the industry in which the Group operates Contractual risks All or a considerable portion of the Group’s income is dependent on contracts with its customers. The Group may not be able to renew or obtain new and favorable contracts when the existing contracts expire, which could materially adversely affect the Group’s results of operations, cash flows and financial condition. The Group’s result of operations and cash flows could be materially adversely affected if any of its customers fails to compensate the Group for its services, terminates contracts with or without cause or fails to renew the existing contracts, and the Group is unable to enter into contracts with new customers at comparable price terms or at all. Furthermore, the Group’s ability to extend or renew contracts, or to obtain new contracts, will depend on the prevailing market conditions. In cases where the Group is not able to obtain new contracts in direct continuation, or where new contracts are entered into on price terms substantially below the existing price terms or on less favorable terms compared to existing contract terms, the Group’s result of operations, cash flow and financial conditions could be materially adversely affected. Risk of contractual default by counterpart A general downturn in financial markets and economic activities may result in a higher volume of late payments and outstanding receivables. The Company’s