Rights issue 2018

Rights issue for new investments

Link to Information Memorandum (in Swedish)

Link to teaser – summary of the rights issue (in Swedish)

Subscription form

Video presentation from Aktiespararnas Aktiedag in Malmö 22 May 2018 – CEO Robert Karlsson presents the company and the rights issue

Video presentation from Financial Stockholm 28 May 2018 – CEO Robert Karlsson presents the company and the rights issue

IPO.se – Video interview with CEO Robert Karlsson on the rights issue

Zhoda Investments has had a solid development since the company assumed its new business focus 18 months ago. The company has acquired and transformed an organic wine business in Dalmatia. In addition, a long-term base for the oil operations in Ukraine has been established through the prolongation for 20 years of the license to extract oil. The operating profit for 2017 amounted to SEK 14 million. In order to create a financial base to further develop the current holdings and to make add-on investments the board of directors has resolved to conduct a new issue of shares with preferential rights for the current shareholders.

Main terms in the rights issue

At the annual general meeting in Zhoda Investments held on 14 June 2017, the shareholders resolved to provide a mandate to the board of directors to conduct a preferential rights issue of shares. Based on this mandate, the board of directors has resolved to conduct an issue with the following main terms:

• The issue, made with preferential rights, can raise a maximum of SEK 20.9 million
• For each A share and/or B share held, the shareholders receive subscription rights with the right to subscribe for 2 A shares and 2 B shares respectively
• The subscription price for each A share and B share amounts to SEK 0.08 per share
• The subscription period starts on 17 May 2018 and lasts until 1 June 2018, with a record date on 15 May 2018
• Upon full subscription, the share capital will increase from SEK 3,500,000 to SEK 10,500,000. The number of shares will then increase from 130,628,729 shares to 391,886,187 shares
• The Board of Directors and Management of Zhoda Investments have declared their intent to subscribe for their preferential share of the issue, which is SEK 9.9 million, equivalent to 48% of the total maximum issue

Valuation and new trading platform for the shares

The valuation in the issue is lower than operational profit 2017 and significantly lower than the company’s equity.

• The subscription price amounts to SEK 0.08 per share, which implies a pre-money valuation of approximately SEK 10.5 million.
• During 2017, the operating profit per share amounted to SEK 0.11 per share and the operating profit to SEK 14.1 million.
• Equity per share attributable to Zhoda’s shareholders as of 31 December 2017 amounted to SEK 0.49 per share and equity to SEK 64.5 million

Following the completion of the issue the company will apply for trade in the share at beQuoted’s OTC market.

Future development and use of funds

Zhoda Investments’ Board of Directors and Management have identified several opportunities to create new significant value from its current holdings. In Ukraine, it is the company’s objective to develop the oil field with new technology in order to more efficiently extract the 8 million proven and probable barrels of oil reserves. It is expected that the oil operations will reach a position during 2018 where it will be able to pay out dividends to Zhoda.

The funds from the issue will primarily be allocated to the wine business in its business transformation and journey to reach the vision of 1 million bottles of premium wine per year. During 2017, production amounted to 100,000 bottles. The company is planning to invest in a new winery at the organic vineyard in Sibenik producing red wine from the indigenous Babic grape. Croatia’s leading wine architect has been contracted to design the new winery that will give an excellent base for increasing capacity as well as even further raising the quality of the wines. The new winery will also become an important component in the Testament brand and a place for tourism and direct winery sales of wine and other activities at high margins. Zhoda recently completed an add-on acquisition on the Dalmatian island of Korcula that will be a cost-efficient winery and excellent brand base for the production of white wine from the Posip grape. In addition to these investments, the funds from the issue will finance working capital connected to an expanding business, as well as to provide a financial base for add-on investments.

Press release 8 June 2018 – Zhoda Investments’ rights issue oversubscribed

Press release 30 May 2018 – Presentations by CEO Robert Karlsson on the current rights issue

Press release 17 May 2018 – Zhoda Investments commences the subscription period and publishes an investment memorandum

Press release 7 May 2018 – Zhoda Investments announces a preferential rights issue for further investments

Press release 4 May 2018 – Annual report 2017: Zhoda Investments records an operating profit of SEK 14 million

Annual Report 2017 Zhoda Investments AB (in Swedish)