Notice of Extraordinary General Meeting in Bong AB (publ)

Regulatory News:

The shareholders of Bong AB (publ) (STO:BONG) are hereby invited to attend the Extraordinary General Meeting to be held on Monday 25 January 2016 at 4.00 p.m. CET at Clarion Malmö Live, Dag Hammarskjölds torg 2 in Malmö.

A. Right to attend and notification

Shareholders who wish to attend the Extraordinary General Meeting ("EGM”) must

– be recorded in the share register kept by Euroclear Sweden AB made as of Tuesday 19 January 2016, and

– notify the Company of their intention to attend the EGM no later than Tuesday 19 January 2016, by any of the following alternatives:

• by post to the address:
  Bong AB (publ)
  Att: Mattias Östberg
  P.O. Box 516
  SE-291 25 Kristianstad, Sweden
• by telephone +46 44-20 70 45
• by e-mail to anmalan.bolagsstamma@bong.com
• at the company’s website www.bong.com

On giving notice of attendance, the shareholder shall state name, personal identity number or corporate identification number, address and telephone number, shareholding and the number of advisors that the shareholder wishes to bring to the EGM (maximum two advisors).

Shareholders represented by proxy must issue a document authorising the proxy to act on the shareholder’s behalf. A proxy form is available on the company’s website www.bong.com and will be provided to shareholders who contact the Company and state their address. Representatives of a legal entity shall present a copy of the certificate of registration or similar document of authorisation showing the persons authorised to act on behalf of the Company. The original of the proxy and the document of authorisation should be sent to the Company together with the notice of attendance.

In order to participate in the proceedings of the EGM, owners with nominee-registered shares must request their bank or broker to have their shares owner-registered with Euroclear Sweden AB. Such registration must be made as of Tuesday 19 January 2016 and the banker or broker should therefore be notified in due time before said date.

B. Agenda for the Meeting

Proposal for Agenda

1. Opening of the Meeting.

2. Election of Chairman of the Meeting.

3. Preparation and approval of the voting list.

4. Approval of the agenda.

5. Election of one or two persons to approve the minutes.

6. Determination of compliance with the rules of convocation.

7. The Board’s proposals for resolution on:
a. amendments of the terms and conditions for convertible bonds;
b. reduction of the share capital;
c. set off issue;
d. directed share issue; and
e. issue of subscription warrants.

8. Closing of the Meeting.

Proposals for resolution

Background

On 10 December 2015, the Company and its two main lending banks (the "Banks”), signed an agreement in principle regarding the Company’s acquisition of the Banks’ claims according to present bank facilities (the "Loan Agreement”) (the "Agreement”). The Agreement means that the Company will acquire the Banks’ claims under the Loan Agreement against payment to the Banks in the form of cash payment of SEK 195,000,000 and by a set-off issue in which the Banks will receive 27,272,727 shares in the Company (the "Set-Off Issue”). In addition, the Banks, through a directed share issue, will be entitled to subscribe for additional 10,000,000 shares in the Company. Finally, the Banks undertake to, free of charge, transfer their total of 23,148,148 shares in the Company to the subscribers of the Bonds (as defined below).

The Agreement is subject to the issue by the Company of senior secured bonds in a total amount of SEK 200,000,000 (the "Bonds”), and that all convertibles issued by the Company under series 2013/2018 (ISIN: SE0005281821) (the "Convertible Bonds”) are converted into shares in the Company.

The Company has offered investors the opportunity to subscribe for the Bonds in so-called units, and, in addition to the Bonds, each unit will entitle the subscriber of one Bond to also receive newly issued subscription warrants and existing shares in the Company. In total, the subscribers of the Bonds will receive 40,000,000 subscription warrants and 23,148,148 shares in the Company, which shares will be obtained directly from the Banks. All Bonds have been placed and will be issued on 21 December 2015.

After the amendment of the terms and conditions of the Convertible Bonds (the "Convertible Bonds Terms”), the Company intends to convert the entire outstanding nominal amount, SEK 75,000,000, into 27,272,727 shares in the Company (the "Conversion”). The implementation of the amendment of the Convertible Bonds Terms is, according to the Convertible Bonds Terms, subject to a resolution by a convertible bondholders’ meeting, at which at least 75 per cent of the holders of the Convertible Bonds (the "Convertible Bondholders”) vote in favour of an amendment of the Convertible Bonds Terms. Such meeting of the Convertible Bondholders is planned by the Company to take place in January 2016 (the "Convertible Bondholders’ Meeting”). As a consequence of the amendment of the terms and the conversion, the Convertible Bondholders will be entitled to subscribe for a total of 9,999,975 shares in the Company through a directed issue.

All transactions described above are jointly referred to as the "Transaction”.

The reason for the deviation from the shareholders’ preferential right in the issues of shares and subscription warrants described above is the implementation of the Transaction.

Amendment of the terms and conditions of convertible bonds (item 7.a)

In order to implement the conversion of Convertible Bonds and thereby the Transaction the Convertible Bonds Terms have to be amended. The Board therefore proposes that the Meeting resolves to insert a new section 8(d) in the Convertible Bonds Terms and that the parts of section 9 in the Convertible Bonds Terms stated below are amended as follows.

Section 8 (part of)

(…)

(d) In addition to Condition 8(a), at any time as from the date of issuance of these Convertible Bonds up to thirty (30) calendar days before the Maturity Date, the Company may, at its sole discretion, convert all, and not some only, of the Convertible Bonds, at a fixed Conversion Price per Share of SEK 2.75, conditional upon:

(i) the shareholders’ meeting in the Company having resolved to the effect that each person who was a Bondholder at the Voting Record Date shall be entitled to, directly or indirectly, subscribe for 133,333 shares in the Company per Convertible Bond owned at the Voting Record Date, during a period of three (3) months at a subscription price in cash of SEK 1.00 per share; and

(ii) the Company certifying to the Agent:

(A) that the Company has exercised its right to convert the Convertible Bonds in accordance with this Clause 8(d);

(B) the Conversion Effective Date; and

(C) that an offer in accordance with paragraph (i) above will be effected on or around the Conversion Effective Date.

The Company shall in such case file a registration form with the Swedish Companies Registration Office in respect of the conversion of all Convertible Bonds to shares in the Company.

For the purpose of this Condition 8(d), the "Voting Record Date” shall mean 12 January 2016.

The amendment of the Convertible Bonds Terms is subject to the resolution by the Convertible Bondholders’ Meeting on an equivalent amendment of terms according to the provisions of the Convertible Bonds Terms.

Reduction of the share capital (item 7.b)

The Set-Off Issue, the directed issue to the Banks, the directed issue to the Convertible Bondholders and the subscription for shares by virtue of subscription warrants are proposed to take place at a subscription price per share below the current quota value of the Company’s shares. In order to carry through the Transaction, the Board therefore proposes that the quota value of the shares is lowered by a reduction of the Company’s share capital, currently SEK 234,989,406, by SEK 59,530,650, without any share reduction, to be transferred to non-restricted equity. After the reduction of the share capital, the Company’s share capital will amount to SEK 175,458,756 and each share will have a quota value of SEK 1.12. The Company’s share capital and equity will be restored by the implementation of the Set-Off Issue and the Conversion.

Set-off issue (item 7.c)

In order to implement the Transaction, the Board proposes that the Company’s share capital is increased by a new issue of shares, principally on the following terms.

The Company’s share capital is to be increased by maximum SEK 30,545,454.16 by the issue of maximum 27,272,727 new shares. The subscription price per share shall be SEK 1.50 and the right to subscribe for shares shall, with deviation from the shareholders’ preferential right, accrue to each of the Banks with 13,636,364 shares and 13,636,363 shares, respectively. Subscription shall be made on a separate subscription list not later than 29 February 2016, or such later date to be determined by the Board. Payment for the shares shall be made not later than in connection with the subscription by set-off of part of the Banks’ claim on the Company according to the Loan Agreement, in total SEK 40,909,090.50, which the Board finds appropriate and which is considered made without any harm to the Company or its creditors. Each issued share will entitle to dividend the first time at the record date for dividend falling immediately thereafter.

Directed issue (item 7.d)

In order to implement the Transaction, the Board proposes that the Company’s share capital is increased by a new issue of shares, principally on the following terms:

The Company’s share capital is to be increased by maximum SEK 22,399,971.94 by the issue of maximum 19,999,975 new shares. The subscription price for each share shall be SEK 1.00. The right to subscribe for 10,000,000 shares shall, with a deviation from the shareholders’ preferential right, accrue to the Banks in equal parts and the right to subscribe for 9,999,975 shares shall accrue to ABG Sundal Collier AB on behalf of the Convertible Bondholders. Subscription shall be made on a separate subscription list between 28 January 2016 and 28 April 2016, or such later date to be determined by the Board. Payment shall be made not later than 13 May 2016, or such later date to be determined by the Board. Each issued share will entitle to dividend the first time at the record date for dividend falling immediately thereafter.

As the subscription price is less than the quota value of the shares, an amount equivalent to the difference between the subscription price and the shares’ quota value shall be provided to the share capital through transfer from the Company’s non-restricted equity.

Issue of subscription warrants (item 7.e)

Finally, the Board proposes that the Company issues subscription warrants, principally at the following terms:

The Company will issue maximum 40,000,000 subscription warrants in series 2016/2019, each subscription warrant entitling to new subscription of one (1) share in the Company. The subscription warrants will be issued free of charge and the right to subscribe for the subscription warrants, with a deviation from the shareholders’ preferential right, shall accrue to ABG Sundal Collier AB on behalf of the subscribers of Bonds. Subscription of subscription warrants shall be exercised at the latest on 29 February 2016, or such later date to be determined by the Board, on a separate subscription list. Subscription of shares by virtue of subscription warrants shall be exercised at the latest on 1 February 2019. At subscription for shares, the price per share shall be SEK 1.15 and the Company’s share capital may increase by maximum SEK 44,799,999.88. Shares issued upon new subscription will entitle to dividend the first time at the record date for dividend falling immediately thereafter.

The complete terms for the subscription warrants are set forth in the "Terms for Subscription Warrants Series 2016/2019 for Subscription of New Shares in Bong AB (publ)”.

Terms and majority requirements

The Board recommends that the resolutions of the Meeting according to the proposals under items 7.b-7.e shall be subject to registration of the resolution of the Meeting in accordance with the proposal by the Board under item 7.a with the Swedish Companies Registration Office. Further, the Board recommends that the resolutions of the Meeting in accordance with the proposals of the Board under items 7.b-7.e shall be passed as one single resolution. The resolution of the Meeting is valid only if it has been approved by at least two-thirds of the votes cast and the shares represented the Meeting.

C. Documentation

The proposals of the Board under items 7.a-7.e including documents pursuant to chapter 13, sections 6-8, chapter 14, section 8 and chapter 20, sections 13-14 are available for the shareholders at the Company from Monday 4 January 2016. Copies will also be sent to shareholders on request and be available at the General Meeting. The above documents will as from said date also be available on the company’s website www.bong.com.

D. Number of shares and votes in the Company

At the issuance of this notice, the total number of shares and votes in the company amounts to 156,659,604.

E. Information at the EGM

The Board of Directors and the CEO shall at the EGM, if requested by a shareholder and the Board of Directors believes that it can be done without significant harm to the Company, provide information regarding circumstances that (i) may affect the assessment of an item on the agenda, (ii) may affect the assessment of the Company’s or its subsidiaries’ financial position or (iii) relate to the Company’s relation to other companies within the group.

Kristianstad in December 2015

The Board of Directors

BONG AB (publ)

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