SCAN BIDCO A/S. relating to the listing of. up to USD 250,000,000 Senior Secured Callable Bonds due 27 June Tranche 1: ISIN: NO

Transcription

1 SCAN BIDCO A/S relating to the listing of up to USD 250,000,000 Senior Secured Callable Bonds due 27 June 2022 Tranche 1: ISIN: NO Tranche 2: ISIN: NO Sole Bookrunner Prospectus dated 21 June 2017

2 i IMPORTANT NOTICE: This prospectus (the "Prospectus") has been prepared by Scan BidCo A/S (the "Issuer", or the "Company" or together with its direct and indirect subsidiaries unless otherwise indicated by the context, the "Issuer Group"), a public limited liability company incorporated in Denmark, having its headquarters located at the address, Kirsinehøj 7, 2770 Kastrup, Denmark, with CVR No , in relation to the application for the listing of the senior secured callable bonds denominated in DKK and USD (the "Bonds") on the corporate bond list on Nasdaq Stockholm Aktiebolag, reg. no ("Nasdaq Stockholm"). Pareto Securities AB has acted as sole bookrunner in connection with the issue of the Bonds (the "Sole Bookrunner"). This Prospectus has been prepared in accordance with the standards and requirements of the Swedish Financial Instruments Trading Act (Sw. lag (1991:980) om handel med finansiella instrument) (the "Trading Act") and the Commission Regulation (EC) No. 809/2004 of 29 April 2004 implementing Directive 2003/71/EC as amended by the Directive 2010/73/EC of the European Parliament and of the Council (the "Prospectus Regulation"). The Prospectus has been approved and registered by the Swedish Financial Supervisory Authority (Sw. Finansinspektionen) (the "SFSA") pursuant to the provisions of Chapter 2, Sections 25 and 26 of the Trading Act. Approval and registration by the SFSA does not imply that the SFSA guarantees that the factual information provided in this Prospectus is correct and complete. This Prospectus has been prepared in English only and is governed by Swedish law and the courts of Sweden have exclusive jurisdiction to settle any dispute arising out of or in connection with this Prospectus. This Prospectus is available at the SFSA s website ( and the Issuer s website ( Unless otherwise stated or required by context, terms defined in the terms and conditions for the Bonds beginning on page 51 (the "Terms and Conditions") shall have the same meaning when used in this Prospectus. Except where expressly stated otherwise, no information in this Prospectus has been reviewed or audited by the Company s auditor. Certain financial and other numerical information set forth in this Prospectus has been subject to rounding and, as a result, the numerical figures shown as totals in this Prospectus may vary slightly from the exact arithmetic aggregation of the figures that precede them. This Prospectus shall be read together with all documents incorporated by reference in, and any supplements to, this Prospectus. In this Prospectus, references to "EUR" refer to the single currency introduced at the start of the third stage of European Economic and Monetary Union pursuant to the Treaty establishing the European Community, as amended, references to "DKK" refer to Danish krona, references to "SEK" refer to Swedish krona, and references to "USD" refer to American Dollars. Investing in bonds is not appropriate for all investors. Each investor should therefore evaluate the suitability of an investment in the Bonds in light of its own circumstances. In particular, each investor should: (a) (b) (c) (d) (e) have sufficient knowledge and experience to carry out an effective evaluation of (i) the Bonds, (ii) the merits and risks of investing in the Bonds, and (iii) the information contained or incorporated by reference in the Prospectus or any supplements; have access to, and knowledge of, appropriate analytical tools to evaluate in the context of its particular financial situation the investment in the Bonds and the impact that such investment will have on the investor s overall investment portfolio; have sufficient financial resources and liquidity to bear all of the risks resulting from an investment in the Bonds, including where principal or interest is payable in one or more currencies, or where the currency for principal or interest payments is different from the investor s own currency; understand thoroughly the Terms and Conditions and the other Finance Documents and be familiar with the behaviour of any relevant indices and financial markets; and be able to evaluate (either alone or with the assistance of a financial adviser) possible scenarios relating to the economy, interest rates and other factors that may affect the investment and the investor s ability to bear the risks. This Prospectus is not an offer for sale or a solicitation of an offer to purchase the Bonds in any jurisdiction. It has been prepared solely for the purpose of listing the Bonds on the corporate bond list on Nasdaq Stockholm. This Prospectus may not be distributed in or into any country where such distribution or disposal would require any additional prospectus, registration or additional measures or contrary to the rules and regulations of such jurisdiction. Persons into whose possession this Prospectus comes or persons who acquire the Bonds are therefore required to inform themselves about, and to observe, such restrictions. The Bonds have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Bonds are being offered and sold outside the United States to purchasers who are not, or are not purchasing for the account of, U.S. persons in reliance upon Regulation S under the Securities Act. In addition, until 40 days after the later of the commencement of the offering and the closing date, an offer or sale of the Bonds within the United States by a dealer may violate the registration requirements of the Securities Act if such offer or sale of the Bonds within the United States by a dealer may violate the registration requirements of the Securities Act if such offer or sale is made otherwise than pursuant to an exemption from registration under the Securities Act. The offering is not made to individuals domiciled in Australia, Japan, Canada, Hong Kong, the Italian Republic, New Zeeland, the Republic of Cyprus, the Republic of South Africa, the United Kingdom, the United States (or to any U.S person), or in any other country where the offering, sale and delivery of the Bonds may be restricted by law. This Prospectus may contain forward-looking statements and assumptions regarding future market conditions, operations and results. Such forwardlooking statements and information are based on the beliefs of the Company s management or are assumptions based on information available to the Issuer Group. The words "considers", "intends", "deems", "expects", "anticipates", "plans" and similar expressions indicate some of these forwardlooking statements. Other such statements may be identified from the context. Any forward-looking statements in this Prospectus involve known and unknown risks, uncertainties and other factors which may cause the actual results, performances or achievements of the Issuer Group to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Further, such forwardlooking statements are based on numerous assumptions regarding the Issuer Group s present and future business strategies and the environment in which the Issuer Group will operate in the future. Although the Company believes that the forecasts of, or indications of future results, performances and achievements are based on reasonable assumptions and expectations, they involve uncertainties and are subject to certain risks, the occurrence of which could cause actual results to differ materially from those predicted in the forward-looking statements and from past results, performances or achievements. Further, actual events and financial outcomes may differ significantly from what is described in such statements as a result of the materialisation of risks and other factors affecting the Issuer Group s operations. Such factors of a significant nature are mentioned in the section "Risk factors" below. This Prospectus shall be read together with all documents that are incorporated by reference, see subsection "Documents incorporated by reference" under section "Other information" below, and possible supplements to this Prospectus.

3 ii TABLE OF CONTENTS SUMMARY RISK FACTORS 1 11 THE BONDS IN BREIF 25 STATEMENT OF RESPONSIBILITY 31 DESCRIPTION OF MATERIAL AGREEMENTS 32 DESCRIPTION OF THE GROUP 33 MANAGEMENT 38 SELECTED FINANCIAL INFORMATION 40 HISTORICAL FINANCIAL INFORMATION 43 OTHER INFORMATION CORPORATE GOVERNANCE ARTICLES OF ASSOCIATION TERMS AND CONDITIONS OF THE BONDS 51 ADDRESSES 92

4 1 SUMMARY This summary is made up of disclosure requirements known as "Sections". These Sections are numbered in sections A E (A.1 E.7). This summary contains all the Sections required to be included in a summary for this type of securities and issuer. Because some Sections are not required to be addressed, there may be gaps in the numbering sequence of the Sections. Even though a Section may be required to be inserted in the summary because of the type of securities and issuer, it is possible that no relevant information can be given regarding the Section. In this case a short description of the Section is included in the summary with the mention of "not applicable". SECTION A INTRODUCTION AND WARNINGS A.1 Introduction and warnings: A.2 Permission from the Issuer to an arranger to sell the bonds: SECTION B ISSUER This summary should be read as an introduction to the Prospectus. Any decision to invest in the securities should be based on consideration of the Prospectus as a whole by the investor. Where a claim relating to the information contained in the Prospectus is brought before a court, the plaintiff investor might, under the national legislation of the member states, have to bear the costs of translating the Prospectus before the legal proceedings are initiated. Civil liability can only be imposed on those persons who have put forward the summary including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the Prospectus or it does not provide, when read together with the other parts of the Prospectus, key information in order to aid investors when considering whether to invest in such securities. Not applicable. B.1 Legal and commercial Scan Bidco A/S, business identity code name: B.2 Domicile, legal form, legislation Scan Bidco A/S is a public limited liability company incorporated under the laws of Denmark and governed by Denmark law. and country of incorporation: B.4 a Tendencies: There has been no material adverse change in the prospects of the Issuer Group since the date of publication of its last audited annual accounts and no significant change in the financial or trading position of the Issuer Group since the end of the last financial period for which audited financial information has been published. B.4 b Trends The global freight market is highly competitive and is heavily influenced by the world economy. B.5 Description of the group and the Issuer's position within the group. The Issuer is wholly owned by Scan (UK) Midco Limited, Reg. No , a UK private limited company operating under the laws of the United Kingdom. B.9 Profit forecasts: Not applicable. The prospectus contains no profit/loss forecast. B. 10 Modification of the Not applicable. Auditors reports on the Issuer s financial statements audit report: are without any qualifications.

5 2 B.12 Selected historical financial information: The information below is derived from the Issuer's audited consolidated financial statements for 2016, which are prepared according to IFRS. No financial information included or referred to in this Prospectus has been reviewed or audited by the Issuer's auditor unless otherwise specifically stated. The Company was founded on 4 March 2016 but the acquisition of the subgroup took place in early August 2016 and as such the income statement only includes the Groups operations for August December 2016 No material adverse change has occurred since the date of the Issuer's latest audited consolidated financial statements. CONSOLIDATED INCOME (DKKt) Revenue 1,250,824 Cost of operation -1,056,826 Gross profit 193,998 Other external expenses -35,064 Staff costs -122,613 Earnings before Interest, Tax, Depreciation, Amortisation and special items 36,321 Depreciations of software and tangible assets -4,535 Earnings before Interest, Tax, Amortisation and special items 31,786 Amortisation of customer relations and trademarks -10,800 Operating profit before special items 20,986 Special items -11,018 Operating profit (EBIT) 9,968 Financial Income 53,174 Financial expenses -82,399 Result before tax -19,257 Tax on loss for the year -1,368 Result for the year -20,625 CONSOLIDATED BALANCE SHEET (DKKt) ASSETS Goodwill 806,123 Customer relations 243,300 Trademarks 47,900 Software 9,746 Intangible assets 1,107,069 Land and buildings 2,188 Plant and machinery 2,650 Fixtures and fittings, tools and equipment 7,179

6 3 Property, plant and equipment 12,017 Receivable from Transgroup Global Inc. 691,307 Other receivables 7,752 Deferred tax asset 3,186 Financial assets 702,245 Total non-current assets 1,821,331 Trade receivables 397,932 Receivables from group entities 739 Income tax receivable 2,131 Other receivables 20,678 Prepayment 7,250 Cash and cash equivalents 176,811 Total current assets 605,541 Total assets 2,426,872 EQUITY AND LIABILITIES Share capital 500 Share premium 647,216 Currency translation reserve -643 Retained earnings -20,835 Equity attributable to the Parent Company 626,238 Non-controlling interests 996 Total equity 627,234 Bond debt 1,310,317 Deferred tax liability 59,682 Total non-current liabilities 1,369,999 Credit institutions 10,807 Trade payables 322,112 Deferred income 22,191 Corporate tax 7,203 Other payables 67,326 Total current liabilities 429,639 Total liabilities 1,799,638 Total equity and liabilities 2,426,872 CONSOLIDATED CASH FLOW (DKKt) Operating profit (EBIT) before special items 20,986 Depreciation, amortisation and impairment 15,335 Exchange rate adjustments -3,255 Change in working capital -6,486 Cash flow from operating activities before special items and interest 26,580

7 4 B.13 Events that affect solvency: B.14 Dependency on subsidiaries Interest received 13,298 Interest paid -39,851 Tax paid -3,715 Cash flow from operating activities -3,688 Purchase of software -1,884 Purchase of property, plant and equipment -485 Investments in Group entities -521,196 Loan to Transgroup Global Inc. -654,393 Cash flow from investing activities -1,177,958 Free cash flow -1,181,646 Capital increase 448,790 Proceeds from issuing of bonds 1,271,208 Redemption of bond loan -360,500 Redemption of other acquisition debt -12,348 Cash flow from financing activities 1,347,150 Change in cash and cash equivalents 165,504 Change in cash and cash equivalents at 4 March 500 Change in cash and cash equivalents 165,504 Change in cash and cash equivalents at 31 December 166,004 No events have recently occurred and which could have a material impact on the assessment of the Issuer's solvency. A significant part of the Issuer Group's assets and revenues relate to the Issuer's subsidiaries. The Issuer is thus dependent upon receipt of sufficient income and cash flow related to the operations of the subsidiaries. B.15 Primary operations: The Issuer Group is a Nordic-based, asset-light freight forwarder and logistics provider with competence in sea, freight, air freight, road transport, warehousing. B.16 Ultimate owner The Issuer is ultimately owned by AEA SGLT Holding I LP. B.17 Credit score No credit rating has been assigned to the Issuer, or its debt securities. SECTION C SECURITIES NOTE C.1 Securities listed Tranche 1: ISIN: NO Tranche 2: ISIN: NO C.2 Currency: Tranche 1: USD Tranche 2: DKK C.5 Transferability Restrictions: C.8 Rights attached to the securities, including ranking and limitations of rights: C.9 Rights attached to the securities, including the nominal interest rate, starting date for the interest The Bonds are freely transferable. The minimum amount of Bonds to be transferred by or to any Bondholder may not be less than the Minimum Trading Unit. When issued, the Bonds will be debt instruments under the Swedish Financial Instruments Accounts Act (1998:1479). The bonds will carry the right to repayment of the nominal amount and interest on the relevant due date. The Bonds will be secured. The bonds are issued under and governed by Swedish law. Tranche 1 Interest Rate: 7.70 per cent. per annum. Tranche 2 Interest Rate: 6.80 per cent. per annum. Interest Payment Dates: 27 June, 27 September, 27 December and 27 March of each year or, to the extent such day is not a banking day in

8 5 calculation, interest due dates, any base interest rate, maturity, yield and any representatives of debenture holders: C.10 Information on interest payments based on derivative components: C.11 Admission to trading: SECTION D RISKS Denmark or Norway, the subsequent banking day in Denmark and Norway. Amortization: during the term of the Bonds, no amortization will be made. Equity Claw Back: The Issuer may at one occasion, in connection with an Equity Listing Event, repay up to 30% of the total Nominal Amount, in which case all outstanding Bonds shall be partially repaid by way of reducing the Outstanding Nominal Amount of each Bond pro rata. Not applicable. The interest rate is not based on any derivative components. The Issuer shall ensure that the Bonds are listed at the corporate bond list on NASDAQ Stockholm or any other regulated market not later than one year after the First Issue Date. D2 Key risks specific to the Group and its industry: Investing in the Bonds involves inherent risks. A number of risk factors and uncertainties may adversely affect the Issuer and the Issuer Group. The risks presented herein are not exhaustive, and other risks not discussed herein, not currently known or not currently considered to be material may also affect the Issuer Group s future operations, performance and financial position, and consequently the Issuer s ability to meet its obligations under the Terms and Conditions. Further, the risk factors are not ranked in order of importance. Potential investors should consider carefully the information contained in this section and make an independent evaluation before making an investment in the Bonds. Competitive landscape The global freight forwarding business is highly competitive. The Issuer Group has a number of competitors across different segments and markets. It is possible that these competitors will grow to be stronger in the future, for example, by means of consolidation. There is a risk that the Issuer Group will not be able to compete successfully against current as well as future competitors, which could have a negative effect on the Issuer Group's operations, earnings and financial position. Currency risk The Issuer Group's functional currency is DKK. Although the Issuer Group's primary operations and cash flows are typically denominated in DKK, the Issuer Group also has operations and costs that are not denominated in DKK. These include USD, EUR and SEK among others. The Issuer Group could consequently be exposed to unfavorable fluctuations in currency exchange rates, which could adversely impact the Issuer Group's operations, earnings and financial position. The Issuer presents its financial statements in DKK. As a result, the Issuer must translate the assets, liabilities, revenue and expenses of all of its operations with functional currencies other than DKK into DKK at then-applicable exchange rates. Consequently, increases or decreases in the value of other currencies may affect the value of these items with respect to the Issuer's non-dkk businesses in its consolidated financial

9 6 statements, even if their values have not changed in their original currency. These translations could significantly affect the comparability of the Issuer's results between financial periods or result in significant changes to the carrying value of the Issuer's assets, liabilities and equity. Credit and counterparty risk The Issuer Group's customers and other counterparties (including suppliers) may end up in a financial situation where they cannot pay the agreed fees or other amounts owed to the Issuer Group as they fall due, or otherwise abstain from fulfilling their obligations. There is a risk that the Issuer Group's counterparties are not able to fulfill their obligations, which could negatively affect the Issuer Group's earnings and financial position. Exposure to key customers The Issuer Group's ten largest customers represent approximately 25 per cent. of the Issuer Group's turnover and approximately 8 per cent. of the Issuer Group's turnover derive from the United Nations. A majority of the agreements with the material customers does not contain volume commitments and there is a risk that not all significant customers will continue to purchase the Issuer Group's services in the same quantities that they have in the past. The loss of any of the Issuer Group's significant customers, or a material reduction in the purchasing of the Issuer Group's services by a significant customer may have a material adverse effect on the Issuer Group's business and financial position. A majority of the customer contracts of the US Bidco Group have no definitive term. Generally either party may terminate these contracts without cause by providing days' prior written notice. As this applies to a majority of the US Bidco Group customer agreements, the loss of such contracts may have a material adverse effect on the US Bidco Group's business and financial position. According to the United Nations' general conditions of contract, the United Nations may terminate agreements governed by these general conditions without cause following 60 days' prior written notice. Given that the United Nations is one of the Issuer Group's key customers, the loss of such contracts may have a material adverse effect on the Issuer Group's business and financial position. The United Nations Procurement Division ("UNPD") might change their sourcing requirements and stop using the Issuer Group as a supplier to the United Nations. Given that the United Nations is one of the Issuer Group's key customers this may have a material adverse effect on the Issuer Group's business and financial position. A transportation project conducted by the Group could be delayed for reasons which are out of the Issuer Group's control. In addition to obligations to compensate the customer for costs incurred due to the delay, which are capped to an amount corresponding to the freight cost and covered by the Issuer Group's insurances, such delays may give rise to negative publicity which in turn could affect the Issuer Group's operations, earnings and financial position.

10 7 Pricing of the Issuer Group's services and procurement The Issuer Group primarily receives its revenue from the margin between customer pricing and carrier pricing. Misjudgments in pricing its services to its customers may affect the turnover, financial position and earnings of the Issuer Group. Moreover, the Issuer Group may not be able to procure carrier services at profitable prices. Improper pricing, rising carrier costs or a decline in customer demand could affect the Issuer Group's operations, earnings and financial position. Ability to adjust prices The Issuer Group is exposed to the risk of prices being increased by its suppliers. In addition, external factors such as market conditions, currency fluctuations and consumer demand affect the prices for the services provided by the Issuer Group's suppliers. Some of the Issuer Group's key agreements lack provisions enabling price adjustments should the prices be affected due to such factors. If the Issuer Group is unable to pass any increase in purchasing costs further on to its customers, the Issuer Group's business, financial condition and results of operations would be adversely affected. Risks related to IT infrastructure The Issuer Group depends on information technology to manage critical business processes, including administrative and financial functions. The Issuer Group uses IT systems for internal purposes and externally in relation to its customers and suppliers. Extensive downtime of network servers, attacks by IT-viruses or other disruptions or failure of information technology systems are possible and could have a negative effect on the Issuer Group's operations. Failure of the Issuer Group's information technology systems could cause transaction errors and loss of customers, and could have negative consequences for the Issuer Group. Sanctions The Issuer Group operates in a number of countries throughout the world, including countries which are subject to sanctions regulations. The Issuer Group is committed to doing business in accordance with applicable sanctions regulations. However, there have been situations where foreign banks have refused to clear payments for the Issuer Group due to its operations in countries subject to sanctions. The process of explaining the Issuer Group's aid and development business and negotiating such refusals by foreign banks are time consuming and, and given that the Issuer Group often is required to pre-pay its subcontractors, adversely affects the Issuer Group's liquidity. Future refusals by foreign banks could have an adverse effect on the Issuer Group's liquidity for an extended period of time and divert significant time and attention from the Issuer Group's senior management. Export controlled goods The Issuer Group is party to a wide variety of contracts that involve export controlled goods, and about 7-10 per cent. of the US Bidco Group's business involves dealings with export controlled goods. The Issuer Group has a formal export control compliance policy and conducts annual training related to export control compliance. As the

11 8 Issuer Group is engaged in the freight forwarding business and a large part of its business relates to exporting goods, there is always a risk of unknown export control violations. Any failure by the Issuer Group to report violations or otherwise comply with the regulations related to export controlled goods could have an adverse effect on the Issuer Group's operations, earnings and financial position. D.3 Key risks specific to the securities: Credit risks Investors in the Bonds carry a credit risk relating to the Issuer Group. The investor's ability to receive payment under the Bonds is therefore dependent on the Issuer Group's ability to meet its payment obligations, which in turn is largely dependent upon the performance of the Issuer Group's operations and its financial position. The Issuer Group's financial position is affected by several factors of which some have been mentioned above. An increased credit risk may cause the market to charge the Bonds a higher risk premium, which would affect the Bonds' value negatively. Another aspect of the credit risk is that a deteriorating financial position of the Issuer Group may reduce the Issuer Group's possibility to receive debt financing at the time of the maturity of the Bonds. Refinancing risk The Issuer may be required to refinance certain or all of its outstanding debt, including the Bonds. The Issuer's ability to successfully refinance its debts is dependent on the conditions of the debt capital and loan markets and its financial condition at such time. Even if the debt capital and loan markets improve, the Issuer's access to financing sources may not be available on favourable terms, or at all. The Issuer's inability to refinance its debt obligations on favourable terms, or at all, could have a material adverse effect on the Issuer Group's business, financial condition and results of operations and on the bondholders' recovery under the Bonds. Liquidity risks The Issuer Group intends to apply for listing of the Bonds on NASDAQ Stockholm. However, there is a risk that the Bonds will not be admitted to trading. Further, even if securities are admitted to trading on a regulated market, active trading in the securities does not always occur and hence there is a risk that a liquid market for trading in the Bonds will not exist or is maintained even if the Bonds are listed. This may result in that the holders cannot sell their Bonds when desired or at a price level which allows for a profit comparable to similar investments with an active and functioning secondary market. Lack of liquidity in the market may have a negative impact on the market value of the Bonds. Furthermore, the nominal value of the Bonds may not be indicative compared to the market price of the Bonds if the Bonds are admitted for trading on NASDAQ Stockholm. The market price of the Bonds may be volatile The market price of the Bonds could be subject to significant fluctuations in response to actual or anticipated variations in the Issuer Group's operating results and those of its competitors, adverse business developments, changes to the regulatory environment in which the

12 9 Issuer Group operates, changes in financial estimates by securities analysts and the actual or expected sale of a large number of Bonds, as well as other factors. In addition, in recent years the global financial markets have experienced significant price and volume fluctuations, which, if repeated in the future, could adversely affect the market price of the Bonds without regard to the Issuer Group's operating results, financial condition or prospects. Security granted to secure the Bonds may be unenforceable or enforcement of the security may be delayed The enforceability of the Transaction Security may be subject to uncertainty. The Transaction Security granted by subsidiaries to the Issuer may be unenforceable if (or to the extent), for example, the granting of the security were considered to be economically unjustified for such subsidiaries (corporate benefit requirement). Even though the net proceeds from the issuance of the Bonds or part thereon may be on-lent to the subsidiaries of the Issuer, there is a risk that such arrangement is insufficient to satisfy the corporate benefit requirement for the granting of security by subsidiaries. Furthermore, the Transaction Security, granted by the subsidiaries of the Issuer may be limited, inter alia, to avoid a breach of the corporate benefit requirement. The transaction security may not be perfected, inter alia, if the security agent or the relevant security provider is not able to or does not take the actions necessary to perfect or maintain the perfection of any such security. Such failure may result in the invalidity of the relevant transaction security or adversely affect the priority of such security interest, including a trustee in bankruptcy and other creditors who claim a security interest in the same transaction security. If the Issuer is unable to make repayment under the Bonds and a court would render a judgment that the security granted in respect of the Bonds was unenforceable, the bondholders may find it difficult or impossible to recover the amounts owed to them under the Bonds. Therefore, there is a risk that the security granted in respect of the Bonds might be void or ineffective. In addition, any enforcement may be delayed due to any inability to sell the security assets. The Issuer is dependent on its subsidiaries A significant part of the Issuer Group's assets and revenues relate to the Issuer's subsidiaries. Accordingly, the Issuer is dependent upon receipt of sufficient income related to the operation of and the ownership in the subsidiaries to enable it to make payments under the Bonds. The Issuer's subsidiaries are legally separate and distinct from the Issuer and have no obligation to pay amounts due with respect to the Issuer's obligations and commitments, including the Bonds, or to make funds available for such payments. The ability of the Issuer's subsidiaries to make such payments to the Issuer is subject to, among other things, the availability of funds. Should the Issuer not receive sufficient income from its subsidiaries, the investor's ability to receive payment under the terms and conditions for the Bonds may be adversely affected.

13 10 The Issuer is dependent on the future success of US Bidco Group and the ability of TGI US Bidco Corp to service its debt to the Issuer. Even though due diligence has been carried out prior to the acquisition, there could be unidentified risks not disclosed in the due diligence. This could have an adverse effect on the US Bidco Group's business, earnings or financial position Insolvency of subsidiaries and structural subordination In the event of insolvency, liquidation or a similar event relating to one of the Issuer's subsidiaries, all creditors of such subsidiary would be entitled to payment in full of their claims out of the assets of such company before the Issuer, as a shareholder, would be entitled to any payments. Defaults by, or the insolvency of, subsidiaries of the Issuer may result in the obligation of the Issuer to make payments under guarantees in respect of such companies' obligations or the occurrence of cross defaults on certain borrowings of the Issuer Group including the Issuer. There is a risk that the Issuer and its assets will not be protected from any actions by the creditors of a subsidiary, whether under bankruptcy law, by contract or otherwise. Further, the Issuer Group operates in various jurisdictions and in the event of bankruptcy, insolvency, liquidation, dissolution, reorganisation or similar proceedings involving the Issuer or any of its subsidiaries, bankruptcy laws other than those of Denmark could apply. The outcome of insolvency proceedings in foreign jurisdictions is difficult or impossible to predict and could therefore have a material and adverse effect on the potential recovery in such proceedings. SECTION E OFFER Risks relating to the clearing and settlement in Verdipapirsentralen ASA (VPS)'s book-entry system The Bonds will be issued in uncertificated and dematerialised bookentry form in the electronic register of Verdipapirsentralen ASA (VPS)'s account-based system, and no physical notes will be issued. Clearing and settlement relating to the Bonds is carried out within Verdipapirsentralen ASA (VPS)'s book-entry system as well as payment of interest and repayment of the principal. Investors are therefore dependent on the functionality of Verdipapirsentralen ASA (VPS)'s account-based system. E.2b Net proceeds and Not applicable. The issue of Bonds did not constitute an offer. expenses E.3 Terms and Not applicable. The issue of Bonds did not constitute an offer. conditions of the offer: E.4 Interests and Not applicable. The issue of Bonds did not constitute an offer. conflicts of interest: E.7 Costs for investors: Not applicable. The issue of Bonds did not constitute an offer.

14 11 RISK FACTORS Investing in the Bonds involves inherent risks. A number of risk factors and uncertainties may adversely affect Scan Bidco AS (the "Issuer") and its subsidiaries (together the "Issuer Group") and the Issuers sister company TGI US Bidco Corp and its subsidiaries (together the "US Bidco Group"). These risk factors include, but are not limited to, financial risks, technical risks, risks related to the business operations of the Issuer Group, environmental and regulatory risks. If any of these or other risks or uncertainties actually occurs, the business, operating results and financial condition of the Issuer Group could be materially and adversely affected, which could have a material adverse effect on the Issuer Group s ability to meet its obligations (including repayment of the principal amount and payment of interest) under the terms and conditions for the Bonds (the "Terms and Conditions"). The risks presented herein are not exhaustive, and other risks not presently known to the Issuer Group, or that the Issuer Group currently deems immaterial, and therefore not discussed herein, may also adversely affect the Issuer Group and adversely affect the price of the Bonds and the Issuer Group s ability to service its debt obligations. Investors should consider carefully the information contained herein and make an independent evaluation before making an investment decision. The risk factors below are not ranked in any specific order. Please note that only a limited legal due diligence has been conducted in relation to the issuance of the Bonds. Thus, there may be risks relating to the Issuer Group and its business which have not been disclosed in the limited legal due diligence which are consequently not disclosed in this document. Market and Group specific risks Competitive landscape The global freight forwarding business is highly competitive. The Issuer Group has a number of competitors across different segments and markets. It is possible that these competitors will grow to be stronger in the future, for example, by means of consolidation. There is a risk that the Issuer Group will not be able to compete successfully against current as well as future competitors, which could have a negative effect on the Issuer Group's operations, earnings and financial position. Global economic conditions A lengthy economic downturn, a decline in the gross domestic product growth rate and world import and export levels, and other geopolitical events could adversely affect the global transportation industry and trigger a decrease in demand for the Issuer Group's services, which may have an adverse impact on the Issuer Group's operations earnings and financial position. Changes in legislation A number of legislations and regulations including regulations governing the activities carried out by the Issuer Group's carriers, taxes and rules may affect the Issuer Group's business and impose restrictions on the Issuer Group's carriers that may affect the Issuer Group's business and financial position. New or amended legislations and regulations could call for unexpected costs or restrict the business conducted by the Issuer Group. Credit and counterparty risk

15 12 The Issuer Group's customers and other counterparties (including suppliers) may end up in a financial situation where they cannot pay the agreed fees or other amounts owed to the Issuer Group as they fall due, or otherwise abstain from fulfilling their obligations. There is a risk that the Issuer Group's counterparties are not able to fulfill their obligations, which could negatively affect the Issuer Group's earnings and financial position. Interest rate risk The Issuer Group is exposed to interest risks on interest-bearing current and non-current liabilities. Changes in interest rates on the Issuer Group's liabilities affect the Issuer Group's results of operations. In addition, the Issuer Group's results of operations and financial position are exposed to the effect of market interest rates. There is a risk that the Issuer Group fails to control interest rate risk and this may have a material adverse effect on the Issuer Group's operations, earnings and financial position. Currency risk The Issuer Group's functional currency is DKK. Although the Issuer Group's primary operations and cash flows are typically denominated in DKK, the Issuer Group also has operations and costs that are not denominated in DKK. These include USD, EUR and SEK among others. The Issuer Group could consequently be exposed to unfavorable fluctuations in currency exchange rates, which could adversely impact the Issuer Group's operations, earnings and financial position. The Issuer presents its financial statements in DKK. As a result, the Issuer must translate the assets, liabilities, revenue and expenses of all of its operations with functional currencies other than DKK into DKK at then-applicable exchange rates. Consequently, increases or decreases in the value of other currencies may affect the value of these items with respect to the Issuer's non-dkk businesses in its consolidated financial statements, even if their values have not changed in their original currency. These translations could significantly affect the comparability of the Issuer's results between financial periods or result in significant changes to the carrying value of the Issuer's assets, liabilities and equity. Taxes and charges The Issuer Group conducts its business in accordance with its interpretation of applicable tax regulations and applicable requirements and decisions. There is a risk that the Issuer Group's or its advisers' interpretation and application of laws, provisions and judicial practice has been, or will at some point be, incorrect or that such laws, provisions and practice will be changed, potentially with retroactive effect. If such an event should occur, the Issuer Group's tax liabilities can increase, which could have a negative effect on its earnings and financial position. Recent acquisitions The Issuer Group has on lent USD 98 million of the bond proceeds to the sister company TGI US Bidco (name changed to Transgroup Global Inc.). The proceeds were used to partly finance the TGI US Bidco s acquisition of TransGroup (16 companies) wich took effect on 1 October Total consideration amounted to USD 145 million. The Issuer Group has in January 2017 acquired the remaining 48% of shares in the subsidiary SGL Thailand.

16 13 On 6 March 2017 the Issuer Group acquired Airlog Group Holding AB (8 companies). Total consideration amounted to DKK 168 million. This was partly financed by DKK 121 million in bond proceeds issued in December Even though due diligence has been carried out prior to the acquisitions, there could be unidentified risks not disclosed in the due diligence. If the Issuer Group and/or the US Bidco Group was unable to identify all risks in the due diligence investigation of target companies, unidentified risks may remain within the company and there is a possibility that the share purchase agreement in respect any of the acquisitions lacks proper protection in respect of warranties or indemnities. The legal advisors engaged in connection with the acquisitions offer only limited reliance towards the Issuer should such unidentified or undisclosed risks materialise. This could have an adverse effect on the Issuer Group's business, earnings or financial position. Claims and legal disputes Claims or legal action may in the future be taken against the Issuer Group which may have significant unfavourable effects on the Issuer Group's financial position, performance, reputation, market position or the pricing of the Bonds. The Issuer Group is currently involved in one litigations, which relate to goods damaged during transportation. The claims under this litigation amount to DKK 5,152, In addition, there are two disputes that amount to (i) USD 1,000,000, and (ii) DKK 1,600,000. The US Bidco Group are currently involved in four material litigations and/or arbitrations, and the US Bidco Group is acting as plaintiff under one of these litigations. The claims under the remaining litigations amount to (i) USD 4,963,431.05, (ii) USD 480,000, (iii) USD 468,000, (iv) USD 360,222, and (v) USD 237,000 (each exclusive of attorneys' fees, interest and arbitration costs).indemnification Under certain customer contracts, the Issuer Group have agreed to broad indemnification obligations, which generally cover all claims, liabilities, losses and expenses arising from any actions taken or events occurring during the Issuer Group's performance of its duties under the contract. Material claims raised under such indemnifications may have unfavourable effects on the Issuer Group's business and financial position. Exposure to key customers The Issuer Group's ten largest customers represent approximately 25 per cent. of the Issuer Group's turnover and approximately 8 per cent. of the Issuer Group's turnover derive from Unicef. A majority of the agreements with the material customers does not contain volume commitments and there is a risk that not all significant customers will continue to purchase the Issuer Group's services in the same quantities that they have in the past. The loss of any of the Issuer Group's significant customers, or a material reduction in the purchasing of the Issuer Group's services by a significant customer may have a material adverse effect on the Issuer Group's business and financial position.

17 14 A majority of the customer contracts of the US Bidco Group have no definitive term. Generally either party may terminate these contracts without cause by providing days' prior written notice. As this applies to a majority of the US Bidco Group's customer agreements, the loss of such contracts may have a material adverse effect on the US Bidco Group's business and financial position. According to the United Nations' general conditions of contract, the United Nations may terminate agreements governed by these general conditions without cause following 60 days' prior written notice. Given that the United Nations is one of the Issuer Group's key customers, the loss of such contracts may have a material adverse effect on the Issuer Group's business and financial position. The United Nations Procurement Division ("UNPD") might change their sourcing requirements and there is and stop using the Issuer Group as asupplier to the United Nations. Given that the United Nations is one of the Issuer Group's key customers this may have a material adverse effect on the Issuer Group's business and financial position. A transportation project conducted by the Issuer Group could be delayed for reasons which are out of the Issuer Group's control. In addition to obligations to compensate the customer for costs incurred due to the delay, which are capped to an amount corresponding to the freight cost and covered by the Issuer Group's insurances, such delays may give rise to negative publicity which in turn could affect the Issuer Group's operations, earnings and financial position. Key personnel The Issuer Group's future development largely depends on the skills, experience and commitment of its key employees who have been engaged in the Issuer Group for a long time, and have together developed the efficient day-to-day operations of the Issuer Group. These employees also have a comprehensive knowledge of the industry in general and of the Issuer in particular. If such key personnel leave the Issuer Group in the future, or take up employment with a competing business, it could have a negative effect on the Issuer Group's operations, earnings and financial position. To a significant degree, the Issuer Group's success is dependent on its ability to hire, retain and develop quality employees throughout the organization. Since the Issuer Group's business model requires that the business continue to grow, it is also important that the Issuer Group has sufficient personnel to support such growth (including various projects to improve the Issuer Group's business). Accordingly, it is very important for the Issuer Group to be seen as an attractive employer. If the Issuer Group is unable to attract, retain and motivate qualified employees at all levels, it could have an adverse effect on the Issuer Group's operations, earnings and financial position. Majority owner The Issuer is currently controlled by one shareholder having the majority ownership in the Issuer, whose interests may conflict with the bondholders', particularly if the Issuer encounters difficulties or is unable to pay its debts as they fall due. Furthermore, the majority owners together, may also have an interest in pursuing acquisitions, divestitures, financings or other transactions that, in its judgment, could enhance its equity investments, although such transactions might involve risks to the bondholders. There is nothing in the terms and conditions for the Bonds that prevent the majority owner or any of its affiliates from acquiring businesses that directly compete with the Issuer. If any such event were to arise this may adversely affect

18 15 the Issuer's operations, financial position and results. Furthermore, it should be noted that a minority stake in the Issuer is owned by its key management. Accordingly, there is a risk that disagreements between the groups of owners may also affect management's engagement in the Issuer Group. Minority owners Certain U.S. subsidiaries of the US Bidco Group are partially owned by minority owners not controlled by the US Bidco Group or the Issuer Group. The operations of the partially owned entities are governed by operating agreements between the US Bidco Group and the minority owners. The operating agreements generally provide the minority owners with certain protection, such as (i) veto rights in case of certain operational and corporate actions (e.g. changing the entity's business, capital expenditures in excess of a certain threshold, borrowing or incurring debts, pledging assets, issuing guarantees, leasing real property, entering into contracts with a term longer than one year, entering transactions with any potential conflict of interest between the US Bidco Group and the entity or the minority owner, hiring employees, and other material actions), (ii) right of first refusal, put options and/or repurchase rights in respect of the minority owner's holding in the entity, (iii) requirements for the entity to make quarterly distributions of profits to its owners, and (iv) right to receive certain information. The minority owners' interests may conflict with the Issuers' and/or the bondholders', particularly if the partially owned entities encounters difficulties or is unable to pay their debts as they fall due. Neither the Issuer Group nor the US Bidco Group has encountered any issues with its minority partners. However, there is a risk that disagreements between the owners of the partially owned entities may have a negative effect on the operations of the partially owned entities and thereby, ultimately, adversely affect the Issuer Group's business, financial condition and results of operations. Pricing of the Issuer Group's services and procurement The Issuer Group primarily receives its revenue from the margin between customer pricing and carrier pricing. Misjudgments in pricing its services to its customers may affect the turnover, financial position and earnings of the Issuer Group. Moreover, the Issuer Group may not be able to procure carrier services at profitable prices. Improper pricing, rising carrier costs or a decline in customer demand could affect the Issuer Group's operations, earnings and financial position. Ability to adjust prices The Issuer Group is exposed to the risk of prices being increased by its suppliers. In addition, external factors such as market conditions, currency fluctuations and consumer demand affect the prices for the services provided by the Issuer Group's suppliers. Some of the Issuer Group's key agreements lack provisions enabling price adjustments should the prices be affected due to such factors. If the Issuer Group is unable to pass any increase in purchasing costs further on to its customers, the Issuer Group's business, financial condition and results of operations would be adversely affected. Suppliers The Issuer Group's ability to service its customers depends on the available capacity of its suppliers. The Issuer Group generally does not commit to any volumes with its suppliers. Inability to maintain national and international logistic network of suppliers may have adverse

19 16 consequences for customer relations, etc., resulting in an adverse effect on the Issuer Group's operations, earnings and financial position. The available capacity of the Issuer Group's suppliers may be affected by, among other things, seasonal variations and unforeseen work stoppages. Independent transportation companies and agents The US Bidco Group have entered into a large number of transportation services agreements with independent transportation companies, and large number of agency agreements with entities in foreign locations. A majority of these transportation services agreements and agency agreements have no definitive term. Generally either party may terminate these contracts without cause by providing days' prior written notice. As these agreements are material for the US Bdico Group, and as the US Bidco Group is to some extent dependent on these independent transportation companies and agents in order to fulfill the US Bidco Group's obligations towards its customers, the loss of such contracts may have a material adverse effect on the US Bidco Group's business and financial position. Under each transportation services agreement, the independent transportation company has the exclusive right to solicit accounts in a certain geographical area. However, certain agreements provide no information regarding the size or location of this area, and other, specified geographical areas are overlapping and subject to more than one transportation services agreement. In addition, some of the agency agreements provides exclusivity in certain jurisdictions. Certain of these exclusive agency agreements overlap the same jurisdiction as other, non-exclusive agency agreements. Hence, there is a risk that the US Bidco Group is in violation of the exclusivity provisions of these transportation services agreement and agency agreements, entitling the contractual counterparties to terminate the relevant agreements and possibly to receive compensations or refunds from the US Bidco Group, which may have an adverse effect on the US Bidco Group's operations, earnings and financial position. Risks related to IT infrastructure The Issuer Group depends on information technology to manage critical business processes, including administrative and financial functions. The Issuer Group uses IT systems for internal purposes and externally in relation to its customers and suppliers. Extensive downtime of network servers, attacks by IT-viruses or other disruptions or failure of information technology systems are possible and could have a negative effect on the Issuer Group's operations. Failure of the Issuer Group's information technology systems could cause transaction errors and loss of customers, and could have negative consequences for the Issuer Group. Compliance with existing laws and regulations The Issuer Group operates its business in many countries and must accordingly observe a number of different regulatory systems across a number of jurisdictions. Services conducted in several jurisdictions require permits, imposing dependency to contractually allocate the obligation to obtain necessary permits with the customers rather than the Issuer Group. Ensuring compliance with such laws, regulations and permits could affect the Issuer Group's business, financial position and results. Negative publicity The Issuer Group relies, among other things, on its brand to maintain and attract new customers and employees. Any negative publicity or announcement relating to the Issuer Group may,

20 17 whether or not it is justifiable, deteriorate the brand value and have a negative effect on, the inflow of deposits, net sales, earnings and financial position. Risks relating to inadequate insurance The Issuer Group has a worldwide insurance policy in place to make sure that all entities are adequately insured towards their respective needs. Furthermore, the Issuer Group has entered into specific insurances for some of its aid and development projects where the Issuer Group's liability under the agreements is not limited or is limited to a very high amount. If the Issuer Group is unable to maintain its insurance cover on terms acceptable to it or if future business requirements exceed or fall outside the Issuer Group's insurance cover or if the Issuer Group's provisions for uninsured costs are insufficient to cover the final costs it may adversely impact the Issuer Group's operations, financial position and results. Sanctions The Issuer Group operates in a number of countries throughout the world, including countries which are subject to sanctions regulations. The Issuer Group is committed to doing business in accordance with applicable sanctions regulations. However, there have been situations where foreign banks have refused to clear payments for the Issuer Group due to its operations in countries subject to sanctions. The process of explaining the Issuer Group's aid and development business and negotiating such refusals by foreign banks are time consuming and, and given that the Issuer Group often is required to pre-pay its subcontractors, adversely affects the Issuer Group's liquidity. Future refusals by foreign banks could have an adverse effect on the Issuer Group's liquidity for an extended period of time and divert significant time and attention from the Issuer Group's senior management. Export controlled goods The Issuer Group is party to a wide variety of contracts that involve export controlled goods, and about 7-10 per cent. of the US Bidco Group's business involves dealings with export controlled goods. The Issuer Group has a formal export control compliance policy and conducts annual training related to export control compliance. As the Issuer Group is engaged in the freight forwarding business and a large part of its business relates to exporting goods, there is always a risk of unknown export control violations. Any failure by the Issuer Group to report violations or otherwise comply with the regulations related to export controlled goods could have an adverse effect on the Issuer Group's operations, earnings and financial position. Risks relating to the Issuer Group's operations in emerging markets The Issuer Group has operations and customers world-wide, including in a number of emerging markets. These markets are subject to greater political, economic and social uncertainties than countries with more developed institutional structures, and the risk of loss resulting from changes in law, economic or social upheaval and other factors may be substantial. Among the more significant risks of operating and investing in emerging markets are those arising from the introduction of trade restrictions, enforcement of foreign exchange restrictions and changes in tax laws and enforcement mechanisms. Furthermore, there is a risk that the Issuer Group fails to understand and comply with certain cultural differences and social norms associated with doing business in such emerging markets. Any failure by the Issuer Group to adapt its business to the prevailing cultural and social norms in the relevant market could have an adverse effect on the Issuer Group's operations, earnings and financial position.

21 18 Borrowings by the Issuer Group The Issuer Group has incurred, and may in compliance with the limits set out in the terms and conditions for the Bonds incur further financial indebtedness to finance its business operations. Such financing may result in interest costs which may be higher than the returns gained by the investments made by the Issuer Group. Borrowing money to make investments will increase the Issuer Group's exposure to the loss of capital and higher interest expenses. Interests on the Issuer Group's borrowings from time to time are subject to fluctuations in the applicable interest rates. Higher interest rates could affect Issuer Group's operations, earnings and financial position. Risks related to acquisitions From time to time, the Issuer Group may evaluate potential acquisitions that are in line with the Issuer Group's strategic objectives. Such acquisitions have, and may in the future, result in an obligation to pay additional purchase price to the seller, possibly affecting the financial position of the Issuer Group. Acquisition activities may present certain financial, managerial and operational risks, including diversion of management's attention from existing core business, difficulties when integrating or separating businesses from existing operations and challenges presented by acquisitions which may not achieve sales levels and profitability that justify the investments made. If acquisitions are not successfully integrated, the Issuer Group's business, financial condition and results of operations may be adversely affected. Future acquisitions could also result in dilutive issuances of the Issuer Group's equity securities, the incurrence of debt, contingent liabilities, amortisation costs, impairment of goodwill or restructuring charges, any of which could harm the Issuer Group's financial condition or results of operations. Business opportunities The Issuer Group's future prospects depend on Issuer Group's ability to expand its business in certain key markets (including Asia and the Nordics), identify potential acquisitions, achieve economies of scale and further develop the business relationships with its key customers. If the Issuer Group fails to take advantage of opportunities that may arise in relation to the factors described above, it could have an adverse effect on the Issuer Group's operations, earnings and financial position. Corporate governance The Issuer Group relies on its employees to carry out the business of the Issuer Group in accordance with its internal corporate policies for governance and compliance. There is a risk that the Issuer Group's employees violate such internal policies, which may expose the Issuer Group to risks such as being in breach of agreements, entering into contradictory agreements, violating applicable laws and regulations etc. Should any of the risks described above materialise, it may have an adverse effect on the Issuer Group's operations, earnings and financial position. Risks related to the growth of the Issuer Group's operations The continuous growth of its operations is a crucial part of the Issuer Group's business model. There is a risk that the Issuer Group will not be able to generate sufficient cash flow internally, or obtain alternative sources of capital on favourable terms in order to support such growth. If the Issuer Group is unable to grow its operations in accordance with the plan outlined in its

22 19 business model due to lack of capital, it could have an adverse effect on the Issuer Group's operations, earning and financial position. Risks relating to technological developments The industry in which the Issuer Group operates is characterized by new technological developments that have resulted in, and will likely continue to result in, improvements in business management and performance. Accordingly, the success and profitability of the Issuer Group depends on, among other things, its ability to: improve existing systems and related processes; address the increasingly sophisticated needs of its customers; and anticipate changes in technology and industry standards and respond to technological developments in a timely manner. If the Issuer Group is not successful in developing new information technology systems (including the enhancement of its existing systems), it could have an adverse effect the Issuer Group's operations, earnings and financial position. Exits and Change of Control Private equity funds make investments with the objective of exiting the investment within a certain time frame. As part of their investment strategy, private equity funds take an active role in managing their portfolio companies. Pursuant to the terms and conditions of the Bonds, certain owners of the Issuer may make an exit by way of a private sale or an initial public offering of the shares in the Issuer without the bondholders being entitled to have their Bonds repurchased, provided that no other person or group, other than these owners of the Issuer or its affiliates, acquires control, directly or indirectly, of more than 50 per cent. of the voting shares of the Issuer or otherwise acquires the power to appoint or remove all, or the majority of, the members of the board of directors of the Issuer. Such an exit may adversely impact the Issuer's and/or the Issuer Group's operations, financial position and results. Furthermore, a change of control of the Issuer Group would entitle some of the Issuer Group's key customers and landlords to terminate their agreements with the Issuer Group. Such terminations may have a material adverse effect on the Issuer Group's business and financial position. Risks relating to the Bonds Credit risks Investors in the Bonds carry a credit risk relating to the Issuer Group. The investor's ability to receive payment under the Bonds is therefore dependent on the Issuer Group's ability to meet its payment obligations, which in turn is largely dependent upon the performance of the Issuer Group's operations and its financial position. The Issuer Group's financial position is affected by several factors of which some have been mentioned above. An increased credit risk may cause the market to charge the Bonds a higher risk premium, which would affect the Bonds' value negatively. Another aspect of the credit risk is that a deteriorating financial position of the Issuer Group may reduce the Issuer Group's possibility to receive debt financing at the time of the maturity of the Bonds. Refinancing risk

23 20 The Issuer may be required to refinance certain or all of its outstanding debt, including the Bonds. The Issuer's ability to successfully refinance its debts is dependent on the conditions of the debt capital and loan markets and its financial condition at such time. Even if the debt capital and loan markets improve, the Issuer's access to financing sources may not be available on favourable terms, or at all. The Issuer's inability to refinance its debt obligations on favourable terms, or at all, could have a material adverse effect on the Issuer Group's business, financial condition and results of operations and on the bondholders' recovery under the Bonds. Liquidity risks The Issuer intends to apply for listing of the Bonds on NASDAQ Stockholm. However, there is a risk that the Bonds will not be admitted to trading. Further, even if securities are admitted to trading on a regulated market, active trading in the securities does not always occur and hence there is a risk that a liquid market for trading in the Bonds will not exist or is maintained even if the Bonds are listed. This may result in that the holders cannot sell their Bonds when desired or at a price level which allows for a profit comparable to similar investments with an active and functioning secondary market. Lack of liquidity in the market may have a negative impact on the market value of the Bonds. Furthermore, the nominal value of the Bonds may not be indicative compared to the market price of the Bonds if the Bonds are admitted for trading on NASDAQ Stockholm. It should also be noted that during a given time period it may be difficult or impossible to sell the Bonds (at all or at reasonable terms) due to, for example, severe price fluctuations, close down or inefficiency of the relevant market or trade restrictions imposed on the market. The Bonds may not be a suitable investment for all investors Each potential investor in the Bonds must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should: have sufficient knowledge and experience to make a meaningful evaluation of the Bonds, the merits and risks of investing in the Bonds and the information contained or incorporated by reference in this Presentation or any applicable supplement; have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the Bonds and the impact Bonds will have on its overall investment portfolio; have sufficient financial resources and liquidity to bear all of the risks of an investment in the Bonds; understand thoroughly the terms and conditions for the Bonds; and be able to evaluate (either alone or with the help of a financial advisor) possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks. The market price of the Bonds may be volatile The market price of the Bonds could be subject to significant fluctuations in response to actual or anticipated variations in the Issuer Group's operating results and those of its competitors, adverse business developments, changes to the regulatory environment in which the Issuer Group operates, changes in financial estimates by securities analysts and the actual or expected sale of a large number of Bonds, as well as other factors. In addition, in recent years the global financial markets have experienced significant price and volume fluctuations, which, if repeated

24 21 in the future, could adversely affect the market price of the Bonds without regard to the Issuer Group's operating results, financial condition or prospects. Ability to service debt The Issuer's ability to service its debt under the Bonds will depend upon, among other things, the Issuer Group's future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, some of which are beyond the Issuer Group's control. If the Issuer Group's operating income is not sufficient to service its current or future indebtedness, the Issuer Group will be forced to take actions such as reducing or delaying its business activities, acquisitions, investments or capital expenditures, selling assets, restructuring or refinancing its debt or seeking additional equity capital. The Issuer may not be able to affect any of these remedies on satisfactory terms, or at all. The Issuer has issued a loan to TGI US Bidco Corp in the approximate amount of USD 98,000,000 to be repaid on demand. The Issuer is dependent on TGI US Bidco Corp's ability to fulfil its obligations under the loan. Should TGI US Bidco Corp become unable to fulfil its debt obligations towards the Issuer, it could have a material adverse effect on the Issuer's business, financial condition and results of operations and, ultimately, on the bondholders' recovery under the Bonds. Security granted to secure the Bonds may be insufficient The Issuer's obligations under the Bonds will be secured by the Transaction Security (as set out in the terms and conditions for the Bonds). There is a risk that the pledged assets will be insufficient for the bondholders should the pledges be realised. Save for the Transaction Security, the Bonds represent unsecured obligations of the Issuer which means that in the event of bankruptcy, reorganisation or winding-up of the Issuer, the holders of the Bonds normally receive payment (pro rata with other unsecured non-priority creditors) after any priority creditors have been paid in full. Each investor should be aware that there is a risk that an investor in the Bonds may lose all or part of their investment if the Issuer or another company in the Issuer Group is declared bankrupt, carries out a reorganisation or is wound-up. Security granted to secure the Bonds may be unenforceable or enforcement of the security may be delayed The enforceability of the Transaction Security may be subject to uncertainty. The Transaction Security granted by subsidiaries to the Issuer may be unenforceable if (or to the extent), for example, the granting of the security were considered to be economically unjustified for such subsidiaries (corporate benefit requirement). Even though the net proceeds from the issuance of the Bonds or part thereon may be on-lent to the subsidiaries of the Issuer, there is a risk that such arrangement is insufficient to satisfy the corporate benefit requirement for the granting of security by subsidiaries. Furthermore, the Transaction Security, granted by the subsidiaries of the Issuer may be limited, inter alia, to avoid a breach of the corporate benefit requirement. The transaction security may not be perfected, inter alia, if the security agent or the relevant security provider is not able to or does not take the actions necessary to perfect or maintain the perfection of any such security. Such failure may result in the invalidity of the relevant transaction security or adversely affect the priority of such security interest, including a trustee in bankruptcy and other creditors who claim a security interest in the same transaction security.

25 22 If the Issuer is unable to make repayment under the Bonds and a court would render a judgment that the security granted in respect of the Bonds was unenforceable, the bondholders may find it difficult or impossible to recover the amounts owed to them under the Bonds. Therefore, there is a risk that the security granted in respect of the Bonds might be void or ineffective. In addition, any enforcement may be delayed due to any inability to sell the security assets. Security over assets granted to third parties The Issuer and the subsidiaries may subject to certain limitations from time to time incur additional indebtedness and provide additional security for such indebtedness. In the event of bankruptcy, re-organization or winding-up of the Issuer, the bondholders will be subordinated in right of payment out of the assets being subject to security. For information on similar events of a subsidiary, please refer to the section "Insolvency of subsidiaries and structural subordination". Risks related to early redemption Under the terms and conditions for the Bonds the Issuer has reserved the possibility to redeem all outstanding Bonds before the final redemption date. Furthermore, the Issuer may at one occasion, in connection with an initial public offering of the shares in the Issuer (after which such shares will be admitted to trading on a regulated market) repay up to 30 per cent. of the nominal amount outstanding under the Bonds. If the Bonds are redeemed before the final redemption date, the bondholders have the right to receive an early redemption amount which exceeds the nominal amount in accordance with the terms and conditions for the Bonds. However, there is a risk that the market value of the Bonds is higher than the early redemption amount and that it may not be possible for bondholders to reinvest such proceeds at an effective interest rate as high as the interest rate on the Bonds and may only be able to do so at a significantly lower rate. It is further possible that the Issuer will not have sufficient funds at the time of the mandatory prepayment to make the required redemption of Bonds. No action against the Issuer and bondholders' representation In accordance with the terms and conditions for the Bonds, the bond trustee will represent all bondholders in all matters relating to the Bonds and the bondholders are prevented from taking actions on their own against the Issuer. Consequently, individual bondholders do not have the right to take legal actions to declare any default by claiming any payment from or enforcing any security granted by the Issuer and bondholders may therefore lack effective remedies unless and until a requisite majority of the bondholders agree to take such action. A bondholder, in certain situations, could bring its own action against the Issuer (in breach of the terms and conditions for the Bonds), which could negatively impact an acceleration of the Bonds or other action against the Issuer or grantors of Transaction Security. To enable the bond trustee to represent bondholders in court, the bondholders may have to submit a written power of attorney for legal proceedings. The failure of all bondholders to submit such a power of attorney could negatively affect the legal proceedings. Under the terms and conditions for the Bonds, the bond trustee will in some cases have the right to make decisions and take measures that bind all bondholders. Consequently, the actions of the bond trustee in such matters could impact a bondholder's rights under the terms and conditions for the Bonds in a manner that would be undesirable for some of the bondholders.

26 23 A failure by a trustee to perform its duties and obligations properly or at all may adversely affect the enforcement or other rights of the bondholders due to, for example, inability to receive any or all amounts payable from the Transaction Security in a timely and efficient manner. The rights of bondholders depend on the bond trustee's actions and financial standing By subscribing for, or purchasing, or accepting the assignment of, any Bond, each holder of a Bond will accept the appointment of the bond trustee (being on the issue date Nordic Trustee & Agency AB (publ)) to act on its behalf and to perform administrative functions relating to the Bonds. The bond trustee shall have, among other things, the right to represent the holders of the Bonds in all court and administrative proceedings in respect of the Bonds. However, the rights, duties and obligations of the bond trustee as the representative of the holders of the Bonds will be subject to the provisions of the terms and conditions for the Bonds and the agent agreement, and there is no specific legislation or market practice in Sweden (under which laws the terms and conditions for the Bonds are governed) which would govern the bond trustee's performance of its duties and obligations relating to the Bonds. A failure by the bond trustee to perform its duties and obligations properly or at all may adversely affect the enforcement of the rights of the holders of the Bonds. Under the terms and conditions for the Bonds, the funds collected by the bond trustee as the representative of the holders of the Bonds must be held separately from the funds of the bond trustee and be treated as escrow funds to ensure that in the event of the bond trustee's bankruptcy, such funds can be separated for the benefit of the holders of the Bonds. However, there is a risk that such segregation of funds will not be respected by a bankruptcy administrator in case of the trustee's bankruptcy. Also, in the event the bond trustee would fail to separate the funds in an appropriate manner, the funds could be included in the bond trustee's bankruptcy estate. The bond trustee may be replaced by a successor bond trustee in accordance with the terms and conditions for the Bonds. Generally, the successor bond trustee has the same rights and obligations as the retired bond trustee. It may not be possible to find a successor bond trustee who will accept the role as bond trustee under the Bonds on commercially acceptable terms or at all. Further, there is a risk that the successor bond trustee may breach its obligations under the above documents or that such bond trustee will be subject to insolvency proceedings. Materialisation of any of the above risks may have a material adverse effect on the enforcement of the rights of the holders of the Bonds and the rights of the holders of the Bonds to receive payments under the Bonds. Bondholders' meetings The terms and conditions for the Bonds include certain provisions regarding bondholders' meetings. Such meetings may be held in order to resolve on matters relating to the bondholders' interests. The terms and conditions for the Bonds allow for stated majorities to bind all bondholders, including bondholders who have not taken part in the meeting and those who have voted differently to the required majority at a bondholders' meeting. Consequently, the actions of the majority of bondholders in such matters could negatively impact a bondholder's rights in a manner that would be negative or detrimental for some of the bondholders. Restrictions on the transferability of the Bonds The Bonds have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or any U.S. state securities laws. Subject to certain exemptions, a holder of the Bonds

27 24 may not offer or sell the Bonds in the United States. The Issuer has not undertaken to register the Bonds under the U.S. Securities Act or any U.S. state securities laws or to effect any exchange offer for the Bonds in the future. Furthermore, the Issuer has not registered the Bonds under any other country's securities laws. Each potential investor should read the discussion under the heading "Important information" for further information about the transfer restrictions that apply to the Bonds. It is the bondholder's obligation to ensure that the offers and sales of Bonds comply with all applicable securities laws. A significant part of the Issuer Group's assets and revenues relate to the Issuer's subsidiaries. Accordingly, the Issuer is dependent upon receipt of sufficient income related to the operation of and the ownership in the subsidiaries to enable it to make payments under the Bonds. The Issuer's subsidiaries are legally separate and distinct from the Issuer and have no obligation to pay amounts due with respect to the Issuer's obligations and commitments, including the Bonds, or to make funds available for such payments. The ability of the Issuer's subsidiaries to make such payments to the Issuer is subject to, among other things, the availability of funds. Should the Issuer not receive sufficient income from its subsidiaries, the investor's ability to receive payment under the terms and conditions for the Bonds may be adversely affected. The Issuer is dependent on US Bidco Group The Issuer is dependent on the future success of US Bidco Group and the ability of TGI US Bidco Corp to service its debt to the Issuer. Even though due diligence has been carried out prior to the acquisition, there could be unidentified risks not disclosed in the due diligence. This could have an adverse effect on the US Bidco Group's business, earnings or financial position. Insolvency of subsidiaries and structural subordination In the event of insolvency, liquidation or a similar event relating to one of the Issuer's subsidiaries, all creditors of such subsidiary would be entitled to payment in full of their claims out of the assets of such company before the Issuer, as a shareholder, would be entitled to any payments. Defaults by, or the insolvency of, subsidiaries of the Issuer may result in the obligation of the Issuer to make payments under guarantees in respect of such companies' obligations or the occurrence of cross defaults on certain borrowings of the Issuer Group including the Issuer. There is a risk that the Issuer and its assets will not be protected from any actions by the creditors of a subsidiary, whether under bankruptcy law, by contract or otherwise. Further, the Issuer Group operates in various jurisdictions and in the event of bankruptcy, insolvency, liquidation, dissolution, reorganisation or similar proceedings involving the Issuer or any of its subsidiaries, bankruptcy laws other than those of Denmark could apply. The outcome of insolvency proceedings in foreign jurisdictions is difficult or impossible to predict and could therefore have a material and adverse effect on the potential recovery in such proceedings. Risks relating to the clearing and settlement in Verdipapirsentralen ASA (VPS)'s book-entry system The Bonds will be issued in uncertificated and dematerialised book-entry form in the electronic register of Verdipapirsentralen ASA (VPS)'s account-based system, and no physical notes will be issued. Clearing and settlement relating to the Bonds is carried out within Verdipapirsentralen ASA (VPS)'s book-entry system as well as payment of interest and repayment of the principal. Investors are therefore dependent on the functionality of Verdipapirsentralen ASA (VPS)'s account-based system.

28 25 THE BONDS IN BRIEF The following summary contains basic information about the Bonds. It is not intended to be complete and it is subject to important limitations and exceptions. Potential investors should therefore carefully consider this Prospectus as a whole, including documents incorporated by reference, before a decision is made to invest in the Bonds. For a more complete understanding of the Bonds, including certain definitions of terms used in this summary, see the Terms and Conditions. Issuer... The aggregate amounts of the Bonds... Scan Bidco A/S. The aggregate amount of the bond loan will be an amount up to a maximum of USD 250,000,000, or the equivalent and combined USD and DKK amount thereof. The Issuer may choose not to issue the full amount of Bonds on an issue date and may choose to issue the remaining amount of Bonds at one or more subsequent dates. At the date of this Prospectus, an initial amount of Bonds of USD 100,000,000 and DKK: 625,000,000. Number of Bonds issued... USD: 100,000,000. DKK: 625,000,000. Tranche 1 ISIN... Tranche 2 ISIN... NO NO First Issue Date June Issue Price... Interest Rates Tranche 1... Interest Rates Tranche 2... Interest Payment Dates... Nominal Amount Trance 1 Nominal Amount Trance per cent. Interest on the Bonds will be paid at a fixed rate of 7.70 per cent. per annum. Interest on the Bonds will be paid at a fixed rate of 6.80 per cent. per annum. 27 March, 27 June, 27 September and 27 December of each year commencing on 27 September Interest will accrue from the Issue Date. The Bonds will have a nominal amount of USD 1 and the minimum permissible investment in the Bonds is USD 120,000. The Bonds will have a nominal amount of DKK 1 and the minimum permissible investment in the Bonds is DKK 800,000.

29 26 Status of the Bonds... The Bonds are denominated in USD and DKK and each Bond is constituted by the Terms and Conditions. The Issuer undertakes to make payments in relation to the Bonds and to comply with the Terms and Conditions. The Bonds constitute direct, general, unconditional, unsubordinated and secured obligations of the Issuer, and: The Bonds constitute direct, general, unconditional, unsubordinated and secured obligations of the Issuer and shall at all times rank at least pari passu with all direct, unconditional, unsubordinated and unsecured obligations of the Issuer, except those obligations which are mandatorily preferred by law, and without any preference among them; will at all times rank pari passu with all direct, unconditional, unsubordinated and unsecured obligations of the Issuer without any preference among them, except those obligations which are mandatorily preferred by law; are effectively subordinated to any existing or future indebtedness or obligation of the Issuer and its subsidiaries that is secured by property and assets that do not secure the Bonds, to the extent of the value of the property and assets securing such indebtedness; and are structurally subordinated to any existing or future indebtedness of the subsidiaries of the Issuer, including obligations to trade creditors. Security... Call Option... The Bonds are secured by security interests granted on an equal and rateable first-priority basis over the share capital of certain Group Companies and other assets of the Group. See the definition of "Transaction Security Documents" in Clause 1.1 (Definitions) of the Terms and Conditions. The Issuer has the right to redeem outstanding Bonds in full at any time at the applicable Call Option Amount in accordance with Clause 9.3 (Voluntary Total Redemption) of the Terms and Conditions.

30 27 Equity Claw Back... Call Option Amount Tranche 1... The Issuer may at one occasion, in connection with an Equity Listing Event, repay up to 30% of the total Nominal Amount in accordance with Clause 9.5 (Voluntary Partial Redemption upon an Equity Listing Event) of the Terms and Conditions. Call Option Amount means: (a) % of the Outstanding Nominal Amount, together with accrued but unpaid interest, if the Call Option is exercised on or after the First Call Date to, but not including, the date falling 42 months after the First Issue Date; (b) (c) (d) (e) (f) % of the Outstanding Nominal Amount, together with accrued but unpaid interest, if the Call Option is exercised on or after the date falling 42 months after the First Issue Date to, but not including, the date falling 48 months after the First Issue Date; % of the Outstanding Nominal Amount, together with accrued but unpaid interest, if the Call Option is exercised on or after the date falling 48 months after the First Issue Date to, but not including, the date falling 54 months after the First Issue Date; % of the Outstanding Nominal Amount, together with accrued but unpaid interest, if the Call Option is exercised on or after the date falling 54 months after the First Issue Date to, but not including, the date falling 60 months after the First Issue Date; % of the Outstanding Nominal Amount, together with accrued but unpaid interest, if the Call Option is exercised on or the date falling 60 months after the First Issue Date to, but not including, the date falling 66 months after the First Issue Date; % of the Outstanding Nominal Amount, together with accrued but

31 28 unpaid interest, if the Call Option is exercised on or after the date falling 66 months after the First Issue Date to, but not including, the Final Redemption Date. Call Option Amount Tranche 2... Call Option Amount means: (a) % of the Outstanding Nominal Amount, together with accrued but unpaid interest, if the Call Option is exercised on or after the First Call Date to, but not including, the date falling 42 months after the First Issue Date; (b) (c) (d) (e) (f) % of the Outstanding Nominal Amount, together with accrued but unpaid interest, if the Call Option is exercised on or after the date falling 42 months after the First Issue Date to, but not including, the date falling 48 months after the First Issue Date; % of the Outstanding Nominal Amount, together with accrued but unpaid interest, if the Call Option is exercised on or after the date falling 48 months after the First Issue Date to, but not including, the date falling 54 months after the First Issue Date; % of the Outstanding Nominal Amount, together with accrued but unpaid interest, if the Call Option is exercised on or after the date falling 54 months after the First Issue Date to, but not including, the date falling 60 months after the First Issue Date; % of the Outstanding Nominal Amount, together with accrued but unpaid interest, if the Call Option is exercised on or the date falling 60 months after the First Issue Date to, but not including, the date falling 66 months after the First Issue Date; % of the Outstanding Nominal Amount, together with accrued but unpaid interest, if the Call Option is

32 29 exercised on or after the date falling 66 months after the First Issue Date to, but not including, the Final Redemption Date. First Call Date... Means the date falling 36 months after the First Issue Date. Final Maturity Date... Means 27 June Change of Control Event... Certain Covenants... Means the occurrence of an event or series of events whereby one or more persons, not being AEA Investors (or an Affiliate thereof), acting together, acquire control over the Issuer and where "control" means (i) acquiring or controlling, directly or indirectly, more than per cent. of the voting shares of the Issuer, or (ii) the right to, directly or indirectly, appoint or remove the whole or a majority of the directors of the board of directors of the Issuer. The Terms and Conditions contain a number of covenants which restrict the ability of the Issuer and other Group Companies, including, inter alia: restrictions on making any changes to the nature of their business; a negative pledge, restricting the granting of security on Financial Indebtedness (as defined in the Terms and Conditions); restrictions on the incurrence of Financial Indebtedness (as defined in the Terms and Conditions); and limitations on the making of distributions and disposal of assets. The Terms and Conditions contain incurrence covenants which govern the ability of the Issuer and the other Group Companies to incur additional debt. Each of these covenants is subject to significant exceptions and qualifications, see the Terms and Conditions. Use of Proceeds... The Net Proceeds from the issuance of the Initial Bonds has been applied to (i) finance the Acquisition, (ii) refinance the Refinancing Debt, (iii) pay Transaction

33 30 Costs, and (iv) finance general corporate purposes of the Issuer Group. Residual proceeds from any issuance of Subsequent Bonds was applied towards general corporate purposes of the Issuer Group, including acquisitions. Transfer Restrictions... The Bonds are freely transferable. The minimum amount of Bonds to be transferred by or to any Bondholder may not be less than the Minimum Trading Unit. No action is being taken in any jurisdiction that would or is intended to permit a public offering of the Bonds or the possession, circulation or distribution of any document or other material relating to the Issuer or the Bonds in any jurisdiction other than Denmark, where action for that purpose is required. Each Bondholder must inform itself about, and observe, any applicable restrictions to the transfer of material relating to the Issuer or the Bonds. Listing... Security Agent... Issuing Agent... Governing Law of the Bonds... Risk Factors... Application has been made to list the Bonds on Nasdaq Stockholm. Nordic Trustee & Agency AB (publ). Verdipapirsentralen ASA (VPS). Swedish law. Investing in the Bonds involves substantial risks and prospective investors should refer to the section "Risk Factors" for a description of certain factors that they should carefully consider before deciding to invest in the Bonds.

34 31 STATEMENT OF RESPONSIBILITY The issuance of the Bonds was authorised by resolutions taken by the board of directors of the Issuer on 29 May 2016, and was subsequently issued by the Issuer on 27 June This Prospectus has been prepared in connection with the Issuer s application to list the Bonds on the corporate bond list of Nasdaq Stockholm, in accordance with the Commission Regulation (EC) No. 809/2004 of 29 April 2004 implementing Directive 2003/71/EC as amended by the Directive 2010/73/EC of the European Parliament and of the Council and Chapter 2 of the Trading Act. The Issuer is responsible for the information given in this Prospectus. The Issuer is the source of all company specific data contained in this Prospectus and the Lead Manager has conducted no efforts to confirm or verify the information supplied by the Issuer. The Issuer confirms that, having taken all reasonable care to ensure that such is the case, the information contained in this Prospectus is, to the best of the Issuer s knowledge, in accordance with the facts and contains no omissions likely to affect its import. Any information in this Prospectus and in the documents incorporated by reference which derive from third parties has, as far as the Issuer is aware and can be judged on the basis of other information made public by that third party, been correctly represented and no information has been omitted which may serve to render the information misleading or incorrect. The board of directors confirms that, having taken all reasonable care to ensure that such is the case, the information in this Prospectus is, to the best of the board of directors knowledge, in accordance with the facts and contains no omission likely to affect its import. 16 June 2017 Scan Bidco A/S The board of directors

35 32 DESCRIPTION OF MATERIAL AGREEMENTS The following is a summary of the material terms of material agreements to which the Issuer is a party and considered as outside of the ordinary course of business. The following summaries do not purport to describe all of the applicable terms and conditions of such arrangements. Loan to TGI US Bidco Corp. In order to finance an acquisition, the Issuer issued a loan to TGI US Bidco Corp. (the "Borrower") approximately in the amount of USD 98,000,000 (the "Loan"). The Loan is evidenced by an intercompany note dated 30 September The Loan was entered into on arm's length terms. The Loan constitutes an asset for the Issuer and is pledged to the Security Agent, in its capacity as security agent for the Bondholders. The Loan shall be repaid on demand by the Issuer and the Borrower shall pay interest on the unpaid principal amount, from the 30 September 2016 until the Loan is repaid in full, at a rate agreed upon by the Issuer and the Borrower from time to time. The proceeds were used by TGI US Bidco Corp to acquire Transgroup Express Inc and Transfair North America International Freight Services Inc, TransLAX LLC and ICO SFO LLC (together with their subsidiaries "TransGroup") on 1 Octob<er Transgroup is a North America-based provider of domestic and international freight forwarding and multi-modal logistics services to customers in the United States and Canada. Transgroup was founded in Seattle in 1986 and the founders remain in the company as key management. TransGroup has a diverse service offering comprising Domestic Surface, Ocean Services, Air Services (domestic and international) and other. It has 17 corporate stations and 31 contract stations in the US and Canada. The corporate stations are majority or fully-owned and Transgroup receives station fees and a proportion of net income. The contract stations are owned by third parties on long-term, low-risk, no capex model, contracts whereby Transgroup receives a share of revenues. The Issuer Group has cooperated with Transgroup in the US market for more than 15 years. In 2009 the groups formed a strategic alliance to further penetrate the US market and the Issuer Group decided to close down its US offices. Transgroup acted as the Issuer Group's exclusive partner for transportations to and from Asia and manages intra-us transportations for the Issuer Group's customers. Additionally, Transgroup also shared the Issuer Group's international network of carriers. The US Bidco Group are currently involved in four material litigations and/or arbitrations, and the US Bidco Group is acting as plaintiff under one of these litigations. The claims under the remaining litigations amount to (i) USD 4,963,431.05, (ii) USD 480,000, (iii) USD 468,000, (iv) USD 360,222, and (v) USD 237,000 (each exclusive of attorneys' fees, interest and arbitration costs).

36 33 History and development DESCRIPTION OF THE GROUP The Company's legal and commercial name is Scan Bidco A/S and is a Danish public limited liability company operating under the laws of Denmark with CVR No The Company was incorporated on 4 March 2016 and has its registered office at Kirstinehøj 7, 2770 Kastrup, Denmark and its headquarters at Kirstinehøj 7, 2770 Kastrup, Denmark, with telephone number In accordance with the articles of association of the Company, adopted on 9 March 2017, the Company s objects are to carry out trades and industry, and any other activities that the Board of Directors deems to be ancillary or related thereto, including owning shares, issuing bonds and incurring other debts relating thereto. Business and operations Scan Global Logistics Holding ApS was founded in 2007 after the merger of the two Danish freight forwarding companies ScanAm and Mahé. Freight forwarding is a service industry specialising in moving goods around the world for exporters and importers. The Issuer Group has an asset-light business model meaning that it acts as an intermediary between companies with transportation requirements and capacity providers by purchasing capacity and overseeing the transportation. The Issuer Group does not own any transportation vehicles or equipment since all transportations are performed by the capacity providers (external haulers, shipping companies and airlines). The Issuer Group offers customers a wide range of transportation and logistics supply chain solutions with a complete coverage on air, sea and overland transportation which is conducted through the Issuer Group's global network of capacity providers and partners. The Issuer Group's main service offerings are set out in greater detail below: Air freight services The Issuer Group has entered into several global agreements and works in partnership with several major airlines to ensure the provision of full air freight services. Historically, the Issuer Group's air freight rates have been fixed with a period of three months. However, the pricing trend is moving towards increased market spot rates and less use of fixed prices. Due to the higher costs of air transportation compared to sea freight, the Issuer Group's air freight customers are typically characterised by high-value and/or time sensitive products. Sea freight services The sea freight division forms the core business of the Issuer Group global operations, together with air freight. The Issuer Group's main focus within the sea freight segment is organising logistics solutions to and from the Nordic region. Sea freight comprises global sea transportation of consignments, including general cargo, containerised and oversized goods. The sea freight operations are generally not profitable for the Issuer Group due to limited economics of scale compared to larger freight forwarders. Sea freight rates are usually settled based on current market spot rate or short-term contracts. In certain contracts the freight rates are linked to the Shanghai freight rate index with a fixed margin. Aid Development and Project Assignment ("ADP") The Issuer Group's ADP unit is operating from Denmark but is serving customers all over the world. The aid and development part of ADP is providing services logistics and supply chain solutions to regions hit by natural disasters or instability. Typical aid assignments include delivery of blankets, tents, water, medicine and food to distressed areas and due to the

37 34 importance of fast delivery most aid transportations are carried out by air freight. After an initial emergency situation has become more stabilised, the Issuer Group manages the development operations which typically involve transportation and delivery of necessary equipment such as building materials, reconstruction tools, engineering gear and camp supplies. Sea freight is the most preferable freight method in these situations due to the size and weight of the equipment. The Issuer has collaborated with the United Nations for more than 30 years and collaborates with several other major aid and humanitarian organisations such as the Médecins Sans Frontières and the Red Cross in Denmark. Road transportation services The Issuer Group offers road transportation services to its Nordic customers and the majority of the transports are within the Nordics. The Issuer Group also offers road transportation to continental Europe. The Issuer Group has five road hubs, where the transportations are administrated and conducted. These hubs are situated at strategic places along the main transportation routes in Denmark (Aarhus and Taastrup) and Sweden (Västervik, Norrköping and Gothenburg). Warehousing The Issuer Group s warehousing operations are primarily located in Denmark, where the Issuer Group leases facilities of approximately 90,000 square metres. Warehousing is offered to further expand the Issuer Group s service offering to manage customers demand for logistics solutions covering the entire supply chain. Warehousing is typically based on long-term and back-to-back agreements with customers. In addition to the Danish market, the Issuer Group also offers warehouse logistics in Asia. Airlog On 6 March 2017 the Issuer Group acquired the Swedish transportation Company Airlog Group Holding AB and its subsidiaries. The acquisition doubled the Issuer Group's core business in Sweden and will strengthen the Issuer Groups strategic position in the Nordic logistics market and offer additional synergies throughout the Group, particularly within its Asian infrastructure. Brands and concepts ScanAm, a Danish provider of freight and logistics services, was created in 1988 and was later acquired by the Danish private equity firm Odin Equity Partners (currently named BWB Partners P/S) in Following that year, Odin Equity Partners acquired another freight and logistics services provider, Mahé, and the two companies merged in 2007, forming Scan Global Logistics. At the time of the merger, ScanAm was a leading sea freight services supplier in the Nordics, while Mahé had a strong focus on the air freight market. By combining the two companies, Odin Equity Partners created a leading provider of global logistics and freight services. The Issuer Group has experienced historical growth primarily driven by organic expansion in new geographical regions as well as increased penetration in existing markets. The Issuer Group has entered several markets in Asia, including China, Indonesia, Malaysia, Japan and Taiwan. The Issuer Group entered the Russian market in 2008 but closed down its operations in 2014 due to poor performance and the severe risk exposure of operating in Russia. In addition to organic growth, the Issuer Group has conducted smaller acquisitions in order to strengthen the Issuer Group s services offerings and geographical reach. PR Shipping, a Danish

38 35 shipping company, was acquired in 2008 to increase the Issuer Group s footprint in Denmark and the Swedish road transportation company Interexpress was acquired in 2013 to reinforce the Issuer Group s road operations in Sweden. Although many freight forwarders operate in the same geographical regions as the Issuer Group they are not always in direct competition with the Issuer Group. The Issuer Group aims to differentiate itself from its competitors by targeting customers with complex or low volume assignments, primarily in the Nordic region but with a need for global transport and logistics solutions. By targeting complex logistics requirements and segments the Issuer Group is targeting less price sensitive projects and purposely avoiding the more commodity-like point-topoint freight forwarding, offered by many competitors. Business model and market overview The Issuer Group is a Nordic based full-service global logistics provider, specialised on organising complex logistics solutions, with 45 years of experience in the global transportation industry. The Issuer Group offers customers a wide range of transportation and logistics supply chain solutions with a complete coverage with air, sea and overland transportation. This is conducted through the Issuer Group's global network of capacity providers and partners, which enables the Issuer Group to deliver logistics solutions across the world. The Issuer Group has established a global organisation with offices strategically located on four continents and 17 countries. The Issuer Group s global reach and extensive network of transportation carriers is essential when tendering for logistics contract for multinational corporations. At the same time, the strategic position of the Issuer Group s offices allows the Issuer Group to quickly and cost efficiently capitalise on new market opportunities due to its globally integrated IT infrastructure. Below follows a description of Issuer Groups main markets. The key customers are international aid and humanitarian agencies such as UN plus large Scandinavian based companies with significant international exposure and presence. The Issuer Group's network of own offices has over time been developed on the back of such business relations. Outside of Scandinavia and Finland the key presence is in North America, through TransGroup, and China, which the group plans to further expand and as well as in several other Asian economies. There is significant potential to increase the Issuer Group's presence is these markets and the plan is to carry out such an expansion over time. Share capital and ownership structure The shares of the Issuer are denominated in DKK. Each share carries one vote and has equal rights on distribution of income and capital. As of the date of this Prospectus, the Issuer had an issued share capital of DKK 500,500 divided into 5,005 of shares. The Issuer is wholly owned by Scan (UK) Midco Limited, Reg. No , a UK private limited company operating under the laws of the United Kingdom. Shareholders agreements The Issuer is not aware of the details of any provision in the arrangement between its shareholders, the operation of which may at a subsequent date result in a change in control of the Issuer.

39 36 Overview of Group structure Currently, the Issuer has, directly and indirectly, 31 wholly-owned subsidiaries and 2 partially owned subsidiaries. Operations are conducted by the subsidiaries and the Issuer is thus dependent on its subsidiaries to generate revenues and profit in order to be able to fulfil its payment obligations under the Bonds. The structure of the Group, including its subsidiaries, is set out below. Unless specified in the overview below, all subsidiaries are owned to 100%. Recent events There has been no recent event particular to the Issuer Group which is to a material extent relevant to the evaluation of the Issuer s solvency. Significant change and trend information There has been no material adverse change in the prospects of the Issuer Group since the date of publication of its last audited annual consolidated financial statements and no significant change in the financial or trading position of the Issuer Group since the end of the last financial period for which audited financial information has been published. Legal and arbitration proceedings Claims or legal action may in the future be taken against the Issuer Group which may have significant unfavourable effects on the Issuer Group's financial position, performance, reputation, market position or the pricing of the Bonds.