Bong AB: Bong Has Completed the Acquisition of Its Lending Banks’ Claims

Regulatory News:

Bong Ljungdahl Sverige AB (STO:BONG)

Bong AB (publ) ("Bong” or the "Company”) has previously announced the agreement in principle made with the Company’s two main lending banks (the "Banks”) regarding repurchase of the Banks’ claims on Bong in order to significantly reduce and change the nature of Bong’s indebtedness (the "Transaction”). The Transaction included and was conditional upon the completion of a bond issue, conversion of the Company’s convertible bonds into equity and issues of shares and subscription warrants. Today, all conditions have been satisfied and the Transaction has been completed.

Below is a summary of the various steps in the Transaction and the effects thereof.

Acquisition of the bank facilities

· Bong has acquired the Banks’ claims on the Company against a cash consideration in the total amount of SEK 195m. The Banks have also received a total of 27,272,727 shares in Bong through a set-off issue against part of the claims.

· The Banks transfer the shares currently held by the Banks, approximately 23m, to the investors of the bonds that were issued on 21 December 2015.

· The Banks are also entitled to subscribe for a total of 10m shares in Bong through a directed issue at a subscription price of SEK 1.00 per share. The subscription may be made up until 28 April 2016.

Convertible bonds

· All convertible bonds in series 2013/2018 have been converted at a conversion price of SEK 2.75 per share, which provides the convertible bondholders with a total of 27,272,727 shares in Bong.

· The conversion will be executed by Euroclear with 4 February 2016 as the record date. It is estimated that the distribution of shares will be made on 8 February 2016.

· The convertible bond holders are also entitled to subscribe for a total of 9,999,975 shares in Bong through a directed issue at a subscription price of SEK 1.00 per share. The subscription may be made up until 28 April 2016.

Bond issue

· Senior secured bonds in an amount of SEK 200m were issued by the Company on 21 December 2015. The bonds have a three year tenor and a fixed annual interest rate of 10.0 percentage points. Each bond has a nominal amount of SEK 250,000 and the bonds are intended to be listed on the regulated market of Nasdaq Stockholm (Corporate Bonds List) within six months from issuance. Bong has undertaken not to declare any dividends during the life of the bonds.

· In accordance with the terms and conditions for the bonds, the bond investors will now receive 50,000 subscription warrants and 28,935 shares in Bong per bond. In total, 40m subscription warrants (with a tenor of three years, which each entitles to subscribe for one share in Bong at a subscription price of SEK 1.15 per share) have been issued and in total approximately 23m shares will be transferred to the bond investors.

· The proceeds from the bond issue have been used to purchase the Banks’ claims.

Effects of the transactions

The completion of the Transaction has resulted in an increase of equity and a reduction of interest-bearing debt by approximately SEK 500m, whereby a reasonable balance between indebtedness and operating profit is achieved. An additional positive effect of the measures is that the interest costs are decreased with approximately SEK 10m per year as a result of the lower debt burden. If the directed share issues are subscribed for in full and full subscription of shares through exercise of the issued subscription warrants is made, an amount of approximately SEK 70m will be added to the equity of the Company.

About Bong

Bong is a leading provider of specialised packaging and envelope products in Europe, offering solutions for distribution and packaging of information, advertising materials and lightweight goods. Important growth areas in the Group are packaging within retail and e-commerce and the envelope market within Eastern Europe. The Group has annual sales of approximately SEK 2.3 billion and about 1,685 employees in 16 countries. Bong has strong market positions in the majority of key markets in Europe, and the Group sees interesting possibilities for continued expansion and development. Bong is a public limited company whose stock is quoted on the Nasdaq Stockholm (Small Cap).

Bong AB (publ) discloses the information in this press release pursuant to the Securities Markets Act. The information was provided for public release on 29 January 2016 at 4.45 pm CET.

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