Summary for Scatec Solar ASA listing prospectus 18 December 2015 ANNEX XXII Disclosure requirements in summaries Summaries are made up of disclosure requirements known as Elements. These elements are numbered in Sections A E (A.1 E.7). This summary contains all the Elements required to be included in a summary for this type of securities and Issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element 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 Element. In this case a short description of the Element is included in the summary with the mention of not applicable. Section A Introduction and warnings Element Disclosure requirement Comments ALL Warning This summary should be read as an introduction to the Prospectus, and is qualified in its entirety by the more detailed information appearing elsewhere in this Prospectus and in the appendices to this Prospectus. Any decision to invest in Scatec Solar ASA ( Scatec Solar or the Issuer ) should be based on a consideration of the Prospectus as a whole by the investor. ALL Consent to use the prospectus by Not applicable financial intermediaries Element Disclosure requirement Comments B.1 Legal and commercial name Scatec Solar ASA Where a claim relating to the information contained in the Prospectus is brought before a court, the plaintiff investor might under the applicable national legislation of a Member State, have to bear the costs of translating the Prospectus before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled the Summary including any translation thereof, and applied for its notification, 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.
B.2 Domicile/Legal form/legislation/country of incorporation Scatec Solar ASA s registered office is at Karenslyst Allé 49 Oslo, Norway, the telephone number is +47 48 08 55 00 and the web site is www.scatecsolar.com The legal name of the Issuer, which is the legal entity that registers for the purpose of financing its operations, is Scatec Solar ASA. The Issuer is incorporated as a public company. The Company s business registration number is 990 918 546 B.4b Known trends The majority of the Company s revenues are derived from the operation of sun power plants. As such the company is exposed to varying weather conditions. The sun conditions vary between seasons over the course of the year but also between individual years. By establishing a portfolio of projects in different geographical locations prior to making decisions regarding investments, the risk of variations in output is reduced. Therefore, the Issuer operates in areas where the number of sun hours is larger. B.5 Group Scatec Solar ASA is a public owned firm with Scatec AS as largest shareholder. Furthermore, Scatec AS is a parent company of a scale of companies across the world that operates within the solar energy sector. A full description of companies legal structure can be found in the Company s annual report B.9 Profit forecast or estimate Not applicable Scatec Solar is not publishing any forecast figures for profit B.10 Qualifications in the audit report Not applicable No qualifications to the annual reports made B.12 Significant change in the issuer s financial or trading position There has not been any significant change in the financial or trading position of the group which has occurred since the end of the last financial period for which either audited financial information or interim financial information have been published on December 31, 2014. There has been no material adverse change in the prospects of the Company since the date of its last published audited financial statements. The Company and its management are not aware of any known trends, uncertainties, demands, commitments or events that are likely to have a material effect on the Company s prospects for at least the current financial year.
B.13 Recent events relevant to the evaluation of the issuer s solvency For all plants in operation or under construction, a significant number of contracts have been entered into, both by the project companies itself and other Scatec Solar entities. The project companies are parties to power purchase agreements with the offtaker, and in most cases will also be party to an implementation/concession agreement with a governmental agency. Additionally, the project companies have entered into finance documents with the senior lenders on standard terms and conditions which includes i.a. a common terms agreement, facility agreements and security agreements. Amongst others, there is a change of control regulation for Share ownership of the Company in its finance agreement with Nordea Bank Norge ASA. Furthermore, the project companies are the contracting party with other Scatec Solar group entities for the EPC contracts, O&M contracts, management services contracts and asset purchase agreements. The Scatec Solar entity holding the ownership in the project companies will, where minority shareholders are present, have entered into a shareholders agreement and funding documents. The business of the Company, similar to other entities operating in a specialised environment, depends on the various power purchase agreements and financing agreements referred to above. B.14 If the issuer is dependent upon other entities within the group, this must be clearly stated No Scatec Solar ASA is not dependent upon other entities within the group B.15 Principal activities Scatec Solar is an integrated independent solar power producer, delivering affordable, rapidly deployable and sustainable source of clean energy worldwide. A long term player, Scatec Solar develops, builds, owns, operates and maintains solar power plants, and already has an installation track record of close to 600 MW. Currently, the company is producing electricity from 279 MW of solar power plants in the Czech Republic, South Africa, Rwanda and Honduras. Construction of additional 147 MW solar power plants in the USA and Jordan is under way. With an established global presence, the company is growing briskly with a project backlog and pipeline of more than 1.5 GW under development in the Americas, Africa, Asia and the Middle East. Scatec Solar is headquartered in Oslo, Norway.
B.16 Direct or indirect ownership Scatec is by 20% owned by Scatec AS, a holding company that also owns a larger share in NorSun, Norsk Titanium, Thor Energy, REEtec, TEGma and Keep-it Technologies The Group consists of the Company and some 50 direct and indirect subsidiaries. The operations of the Group are carried out by the Company through certain key subsidiaries, while certain of the Company's direct and/or indirect subsidiaries currently are dormant or have only limited operations. B.17 Credit ratings Not applicable - No official credit rating exists Element Disclosure requirement Comments C.1 Type of class of securities being offered Senior unsecured bonds, floating rate with maturity November 2018 (ISIN: NO0010752298) C.2 Currency of the securities issue. NOK C.5 Any restrictions on the free transferability of the securities. The Bonds will only be offered or sold within the United States to Qualified Institutional Buyers ("QIBs") as defined in Rule 144A under the U.S. Securities Act. The Bonds have not and will not be registered under the U.S. Securities Act, or any state securities law except pursuant to an exemption from the registration requirements of the U.S. Securities Act and appropriate exemptions under the laws of any other jurisdiction. The Bonds may not be offered or sold within the United States to, or for the account or benefit of, any U.S. Person (as such terms are defined in regulations), except pursuant to an exemption from the registration requirements of the U.S. Securities Act. See further details in the Application Form. Failure to comply with these restrictions may constitute a violation of applicable securities legislation. Nordea is not registered with the U.S. Securities and Exchange Commission as a U.S. registered broker-dealer and will not participate in the offer or sale of the Bond within the United States. C.8 Rights attached to the securities The Bonds shall be senior debt of the Company and rank at least pari passu with all other unsecured senior obligations of the Company other than obligations which are mandatorily preferred by law. The Bonds shall rank ahead of subordinated capital. The Bonds shall be unsecured.
C.9 C.8 plus: the nominal interest rate the date from which interest becomes payable and the due dates for interest where the rate is not fixed, description of the underlying on which it is based maturity date and arrangements for the amortisation of the loan, including the repayment procedures an indication of yield name of representative of debt security holders C.10 C.9 plus: if the security has a derivative component in the interest payment, provide a clear and comprehensive explanation to help investors understand how the value of their investment is affected by the value of the underlying instrument(s), especially under the circumstances when the risks are most evident C.11 An indication as to whether the securities offered are or will be the object of an application for admission to trading, with a view to their distribution in a regulated market or other equivalent markets with indication of the markets in question. 3 months NIBOR, Interest on the Bonds will commence to accrue on the Settlement Date (November 19, 2015) and shall be payable quarterly in arrears on the interest payment day in 19 February, 19 May, 19 August and 19 November each year and on the Maturity Date (each an Interest Payment Date ). Business day convention is modified following, day count fraction is act/360 19 November 2018 (3 years after Settlement Date). Amortizations: none Yield: Floating Rate + 650 bps p.a., quarterly interest payments. Trustee: Nordic Trustee ASA (formerly Norsk Tillitsmann ASA) Not applicable The security has not a derivate component in the interest payment An application for listing at Oslo Børs will be sent as soon as possible after the Disbursement Date C.12 The minimum denomination of an issue. NOK 500,000 Element Disclosure requirement Comments
D.2 Key information on the key risks that are specific to the issuer Prospective investors should consider, among other factors, the following risks relating to Scatec Solar, its business and the market in which the Company operates: - Scatec Solar is dependent on receipt of funds from its subsidiaries and its ability to serve its payment obligations under the bonds is dependent on receiving sufficient funds from its subsidiaries and participations - Variations in the price of electricity, subsidies and other benefits may reduce Scatec Solar s earnings - Unfavourable weather conditions, changes in climate, technological failures and significant discrepancies between estimates and actual electricity production may have a negative impact on Scatec Solar s earnings. New and more efficient energy production technology risks may render Scatec Solar s production base obsolete and affect its earnings - Political and regulatory impact risks may cause negative changes for Scatec Solar in legislature or subsidies - Scatec Solar is political risk since Scate Solar runs large part of its operations in the Africa region - If Scatec Solar s customers fail to meet their obligations, it could adversely affect Scatec Solars s sales, financial position and earnings. - New investments in existing plants are subject to extension of existing land lease agreements or conclusion of a new land leases by Scatec Solar s subsidiaries. Lease agreements may also be terminated if Scatec Solar s subsidiaries fail to meet their contractual obligations. - Scatec Solar is reliant on the use of third party land in accessing its sites and Scatec Solar has secured rights of use however it cannot be ruled out that access rights can be revoked in some circumstances Asset pledges - Counterparty risks - Risks related to disputes - Tax risks - Geopolitical risks - Insurance risks - Potential disasters
D.2 Key information on the key risks that is specific to the issuer. In the case Scatec Solar is unable to meet certain financial and non-financial covenants set in its agreements with financiers, Scatec Solar as a result could be obliged to repay the borrowed facilities prematurely, which may adversely affect Scatec Solar s financial position Scatec Solar has pledged assets, receivables and shares in subsidiaries to secure financing for projects and in an event of default unsecured creditors would be entitled to recover their debts from the assets and receivables of the group only after the claims of existing and future secured creditors would be satisfied in full Counterparty risk is the risk of incurring a loss if a counterparty fails to meet its obligations, which could adversely affect Scatec Solar s sales, financial position and earnings Risks related to disputes, where Scatec Solar can become involved in a dispute in the future and if an unfavorable decision were to be given against Scatec Solar, significant fines, damages and/or negative publicity could adversely affect Scatec Solar s earnings and financial position Scatec Solar s interpretations of the local tax rules may not be entirely correct or that local rules change with retroactive effect which could affect Scatec Solar s earnings and financial position Part of Scatec Solar s assets are located in the Africa region and any adverse change in the economic or political environment and future retroactive amendment of feed-in tariffs and/or premiums may affect Scatec Solar s business viability Scatec Solar is unable to insure against all risks and may be exposed under certain circumstances to uninsurable hazards and risks which could have a material adverse effect the company s business, results of operations and financial condition Scatec Solar may be affected by events such as radioactive, chemical or biological contamination, environmental disasters and acts of terrorism which are outside its control and may have a variety of adverse consequences for Scatec Solar, including risks and costs related to the damage or destruction of property, suspension of operation and injury or loss of life, as well as litigation related thereto.
D.3 Key information on the key risks that are specific to the securities Prospective investors should consider, among other factors, the following risks related to the securities described herein: - Potential purchasers and sellers of the bonds should be aware that they may be required to pay taxes or other documentary charges or duties in accordance with the laws and practices of the country where the bonds are transferred - When the bonds are purchased and sold several types of costs are incurred in addition to the purchase or sale price of the bonds and bondholders may also incur additional third party costs which may significantly reduce or eliminate any profit from holding the bonds - Scatec Solar s ability to make scheduled payments and repay its indebtedness will depend on the future financial performance of its subsidiaries which can be affected by factors Scatec Solar cannot control - The pricing of the bonds can be volatile in the market and potential investors should note that it may be difficult or impossible to trade and sell the bonds in the secondary market - Scatec Solar is relying upon exemptions from registration under the U.S. Securities Act, applicable state securities laws and UK and EU securities laws in the placement of the Bonds, the Bonds may only be transferred in a transaction registered under or exempt from the registration or prospectus requirements of such legislation in the future, therefore, investors may not be able to sell their Bonds at their preferred time or price. - Historically, the market for non-investment grade debt has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the Bonds. - The bonds are subject to optional redemption by Scatec Solar at their outstanding principal amount, plus accrued and unpaid interest to the date of redemption, plus a premium calculated in accordance with the terms and conditions of the bond agreement. This is likely to limit the market value of the bonds and it may not be possible for bondholders to reinvest proceeds at an effective interest rate as high as the interest rate on the bonds. - Element Disclosure requirement Comments
D.3 Key information on the key risks that are specific to the securities Significant changes to the applicable NOK exchange rates due to economic, political or other factors present certain risks if an investor s financial activities are denominated principally in a currency other than NOK E.2b Reasons for the offer/use of proceeds The net proceeds from the Bond Issue shall be used for the establishment and operation of business based on technology for production of solar electricity, hereunder investment in companies operating such business. The total proceeds amounted to approximately NOK 500,000,000 E.3 A description of the terms and conditions of the offer. All conditionality has been lifted following the Settlement Date.
E.4 A description of any interest that is material to the issue/offer including conflicting interests. The Company is currently involved in the following legal proceeding: Terrafix Suedafrika (Pty) Ltd. There is a pending arbitration between Scatec Solar 163 (Pty) Ltd (Scatec) and Terrafix Suedafrika (Pty) Ltd (Terrafix). Terrafix is the Claimant, and initiated arbitration proceedings against Scatec, the Respondent, in or about December 2013. On the 27th of November 2015 the arbitrator has found in the Company s favour on all counts. However, the award is subject to an appeal right, and it is yet known if Terrafix will appeal the award or not, and thus the matter is not yet final. The amounts claimed by Terrafix (and which could then be assumed to be claimed in an appeal), cumulatively, are in the region of MZAR 248 (approx. MNOK 150). It is estimated that the counterclaim against Terrafix by the Company is in the region of MZAR 370 (approx. MNOK 220). On the basis of the award (and if no appeal is made or the appeal fails, then the Company will seek to reclaim part of the claim set out above). No accruals have been made by the Company. E.7 Estimated expenses charged to the investor by the issuer or the offeror Not applicable. The Company has not charged any costs, expenses or taxes directly to any bondholder or to any investor in connection with the Bond Offering.