BE Group AB: BE Group Announces Rights Issue of App. MSEK 160, Fully Covered by Means of Subscription and Guarantee Undertakings

Regulatory News:

BE Group AB (STO:BEGR)

Not for distribution, directly or indirectly, in or to the United States, Australia, Hong Kong, Canada or Singapore or any other jurisdiction where such distribution of this press release would be subject to legal restrictions.

Summary

· The Board of Directors of BE Group AB (publ) ("BE Group” or the "Company”) has resolved on a rights issue of approximately SEK 160 million, before transaction costs

· The rights issue is fully secured

· The rights issue is subject to approval by the Extraordinary General Meeting, which will be held on 11 February 2014

· Full terms of the rights issue will be announced on 11 February 2014 at the latest

· The trading in subscription rights is expected to take place as from 21 February 2014 up to and including 4 March 2014

· The subscription period will run as from 21 February 2014 up to and including 7 March 2014

· The rights issue proceeds will be used in order to strengthen BE Group’s financial position and to reduce the Company’s debt by loan amortization

Background and reasons

BE Group is a trading and service company with a wide range of products within steel, stainless steel and aluminum. The Company offers direct deliveries, stock sales and production services to customers primarily in the construction and engineering industry mainly in Sweden and Finland.

The demand for the Company’s products fell sharply in late 2012 and the weak market continued during 2013. Several changes in the group organization were therefore implemented in 2013 with the purpose of refining the business and increasing the market focus on the core businesses in Sweden and Finland. During 2013 cost reductions and other streamlining activities within the group organization were implemented. The measures resulted in a decrease in personnel equal to approxi¬mately 140 full time services in Sweden and Finland and all measures combined resulted in an annual cost reduction of approximately 65 MSEK.

In order to strengthen the Company’s financial position, the Board of Directors has decided, subject to the Extraordinary General Meeting’s approval, on a rights issue of approximately SEK 160 million (before transaction costs), leading to the Company being provided with a net amount of at least SEK 150 million. The proceeds from the rights issue will be used in order to strengthen BE Group’s financial position and to reduce the Company’s debt by loan amortization.

The Board of Directors of BE Group believes that the combined impact of implemented efficiency measures in 2013 and the rights issue will improve the Company's competitive edge and result in an improved financial position.

The rights issue

The Board of Directors has on 19 January 2014 resolved, subject to the Extraordinary General Meeting’s approval, on a new share issue of approximately SEK 160 million (before transaction costs), with preferential rights for the Company’s shareholders, in proportion to the number of shares held as of the record date. In the event that not all shares are subscribed for with preferential rights, the Board of Directors shall resolve on the allotment of shares subscribed for without subscription rights up to the maximum amount of the new share issue. In such case, such shares shall be allotted to those who have subscribed for shares by the exercise of subscription rights and notified that they wish to subscribe for additional shares, irrespective of whether they were shareholders on the record date, pro rata in relation to the number of subscription rights each one has exercised for subscription. In so far as allotment in accordance with the above cannot be executed pro rata, allotment shall be made by drawing of lots. Any remaining shares shall be allotted those who have provided guarantees for the share issue, pro rata in relation to the provided guarantee undertakings.

The Board of Directors will no later than on 11 February 2014 resolve, and announce, the maximum amount of the share capital increase, the number of subscription rights received per share and the number of subscription rights required to subscribe for a new share, the maximum number of shares to be issued and the subscription price to be paid for each new share.

The record date for participation in the rights issue is 17 February 2014 and the subscription period (subscription through payment) runs as from 21 February 2014 up to and including 7 March 2014, with the right for the Board of Directors to extend the subscription period. The trading in subscription rights is expected to take place as from 21 February 2014 up to and including 4 March 2014.

The rights issue is subject to approval by the Extraordinary General Meeting, which will be held on 11 February 2014. For further information, please see notice of the Extraordinary General Meeting in separate press release.

Subscription and guarantee undertakings

The rights issue is fully secured. The Company’s largest shareholder, AB Traction, the Chairman of the Board of Directors, Anders Ullberg, the Company’s President and CEO, Kimmo Väkiparta, and If Skadeförsäkring AB have undertaken to exercise their preferential right in the new share issue, corresponding in total to approximately 29.9 per cent* (so called subscription undertakings). In addition, a number of guarantors, among them AB Traction, Anders Ullberg, Kimmo Väkiparta, Petter Stillström, CEO of AB Traction, and If Skadeförsäkring AB, have guaranteed to subscribe for the remaining part of the new share issue (so-called guarantee undertakings). The guarantee commission amounts to 4 per cent of respective guarantors’ maximum guaranteed amount according to the guarantee undertakings.

If the new share issue is not fully subscribed for, AB Traction will, due to fulfilment of the subscription and guarantee undertaking, increase its share of the capital and votes in the Company. The maximum share of capital and votes that AB Traction may reach will be published when the final terms of the new share issue have been decided by the Board of Directors. The Swedish Securities Council (Sw. Aktiemarknadsnämnden) has granted AB Traction an exemption from the mandatory bid requirement in the event that AB Traction’s share of votes in the Company, due to fulfilment of the subscription and guarantee undertaking, would trigger a mandatory bid. A condition for the Swedish Securities Council’s exemption from the mandatory bid in respect of the guarantee undertaking is that the shareholders at the Meeting approve the Board of Directors’ new share issue resolution with at least two thirds majority of both the votes cast and the shares represented at the Meeting, disregarding shares owned and represented by AB Traction.

Preliminary timetable for the rights issue

11 February at the latest - The subscription price and offer ratio are announced in a press release

11 February - The Extraordinary General Meeting resolves on approval of the Board of Directors’ rights issue resolution

12 February - Last day of trading in BE Group’s share including subscription rights

13 February - BE Groups share is traded excluding subscription rights

17 February - Record date for allotment of subscription rights, i.e. shareholders who are registered in the Company’s share register as of this day will receive subscription rights for participation in the new share issue

18 February - Estimated date for publication of the prospectus

21 February-4 March - Trading in subscription rights

21 February-7 March - Subscription period (subscription through payment)

Around 13 March - Announcement of the preliminary outcome of the new share issue

Financial and legal advisors

Erik Penser Bankaktiebolag is acting as financial advisor and Mannheimer Swartling Advokatbyrå AB is acting as legal advisor to BE Group.

* Exclusive of the Company’s holding of own shares.

BE Group, listed on the NASDAQ OMX Stockholm exchange, is a trading and service company in steel and other metals. BE Group provides various forms of service for steel, stainless steel and aluminium applications to customers primarily in the construction and engineering sectors. In 2012, the Group reported sales of SEK 4.6 Bn. BE Group has more than 800 employees, with Sweden and Finland as its largest markets. The head office is located in Malmö, Sweden. Read more about BE Group at www.begroup.com

Important information

The information in this press release does not contain or constitute an offer to acquire, subscribe or otherwise trade in shares, subscription rights or other securities in BE Group. Any invitation to the persons concerned to subscribe for shares in BE Group will only be made through the prospectus that BE Group estimates to publish on or around 18 February 2014.

This press release may not be released, published or distributed, directly or indirectly in or into the United States, Australia, Hong Kong, Japan, Canada, New Zealand, Singapore or South Africa or any other jurisdiction where such action is wholly or partially subject to legal restrictions or where such action would require additional prospectuses, registrations or other actions in addition to what follows from Swedish law. Nor may the information in this press release be forwarded, reproduced or disclosed in such a manner that contravenes such restrictions or would require such requirements. Failure to comply with this instruction may result in a violation of applicable securities laws.

No subscription rights, BTAs (interim shares) or new shares have or will be registered under the United States Securities Act of 1933 ("Securities Act”) or securities legislation in any state or other jurisdiction in the United States and may not be offered, subscribed, sold or transferred, directly or indirectly within the United States, other than pursuant to an exemption from the registration requirements of the Securities Act and in accordance with securities laws in relevant state or other jurisdiction in the United States.

This press release may contain forward-looking statements which reflect Be Group's current view on future events and financial and operational development. Words such as "intend”, "expect”, "anticipate”, "may”, "believe”, "plan”, "estimate” and other expressions which imply indications or predictions of future development or trends, and which are not based on historical facts, are intended to identify forward-looking statements. Forward-looking statements inherently involve both known and unknown risks and uncertainties because they depend on future events and circumstances. Forward-looking statements do not guarantee future results or development and the real outcome could differ materially from the forward-looking statements.

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