Investor Relations
Extraordinary Announcement of 4iG Plc.
On signing a contract aimed at acquiring 51% of the shares of Space-Communications Ltd.
4iG Public Limited Company (“4iG”) hereby informs the participants of the capital market that in the course of a procedure with several conditions aimed at acquiring 51% shares in Space-Communications Ltd. (“Spacecom”), a Share Allocation Agreement between Hungaro Digitel Kft. (“the Purchaser”, “HDT”), the subsidiary of 4iG and Antenna Hungária Zrt, and Space-Communication Ltd., has been concluded by the parties today, together with the related share subscription agreement. Spacecom is a leading Israeli fixed-satellite operator and satellite service provider that operates the AMOS satellite fleet of four geosynchronous satellites at various orbital positions and offers its clients with broadcast and broadband satellite services at a global scale. Spacecom is listed on the Tel Aviv Stock Exchange and in 2020 it had a revenue of USD 88 million and an EBITDA of USD 52 million.
Following Spacecom’s
Immediate Report dated June 15, 2021 with respect to the execution of a
non-binding letter of intent for a contemplated investment in the Company, 4iG hereby
announces that on October 11th, 2021, it has entered into a binding
Share Allocation Agreement with Spacecom and with the Purchaser, HDT, and with
4iG, pursuant to which, Spacecom shall issue and allot to the Purchaser
ordinary shares of the Company which will constitute, following their issuance,
51% of the issued and outstanding share capital and of the voting rights of Spacecom
(on a partially diluted basis).
At the Closing, Spacecom will issue to the Purchaser, by way of an Exceptional Private Offer, 26,028,593 ordinary shares of the Company, which will constitute, following their issuance, approximately 51% of the issued and outstanding share capital and of the voting rights in the Company in exchange for an aggregate amount of NIS 221,243,040 (reflecting a price per share of NIS 8.5) (the “Purchase Price” and “The Exceptional Private Offer”, respectively).
It is hereby clarified that the consummation of the Transaction is subject to the fulfillment of the Conditions Precedent, including, but not limited to, the receipt of the Regulatory Approvals and other third parties’ approvals such as the General Meeting of the Spacecom’s shareholders, which by their nature are not under the Company’s control. Accordingly, there is no certainty nor guarantee that the Transaction will be consummated.
Find attached the announcement of Spacecom on the Tel-Aviv Stock Exchange.
Budapest, October 12th, 2021
4iG Plc.
Appendix to the Extraordinary Announcement
Space-Communication
Ltd.
(the
“Company”)
ToTel Aviv
Stock Exchange Ltd. Israel Securities Authority
www.tase.co.il www.isa.gov.il
Subject: Immediate Report
The Execution of a
Binding Agreement for an Investment in the CompanyFollowing the
Company’s Immediate Report dated June 15, 2021 with respect to the execution of
a non-binding letter of intent for a contemplated investment in the Company,
the Company hereby announces that on October [11], 2021, following the approval
of the Company’s Board of Directors (the “Board”), the Company entered into a
binding Share Allocation Agreement with 4iG Nyilvánosan Működő Részvénytársaság
and with its subsidiary, Hungaro DigiTel Kft (“4iG” and the “Purchaser”,
respectively), pursuant to which, subject to the fulfillment of the Conditions
Precedent (as defined below), the Company shall issue and allot to the
Purchaser ordinary shares of the Company which will constitute, following their
issuance, 51% of the issued and outstanding share capital and of the voting
rights of the Company (on a partially diluted basis)[1] in
exchange for apprx. NIS 221 million as
set forth below (the “Agreement”, and “Transaction”, respectively).
_________________________________________________
[1]For the purposes hereof, “partially diluted basis” means that the calculation shall be made out of the issued and outstanding share capital of the Company, assuming the exercise of all convertible securities available for exercise into shares of the Company except for: (a) Bond series Q and (b) 611,000 options to purchase Company’s shares, at an exercise price of NIS 19.4.
The Summary of the
Agreement:
1. Transaction’s Structure – At the Closing,
the Company will issue to the Purchaser, by way of an Exceptional Private Offer
(as such term is defined in the Securities Regulations (Private Offer of
Securities in a Listed Company), 5760-2000,
(“Private Offer Regulations”), 26,028,593 ordinary shares of the Company (the
“Allotted Shares”) which will constitute, following their issuance,
approximately 51% of the issued and outstanding share capital and of the voting
rights in the Company (on a partially diluted basis, as set forth above) in
exchange for an aggregate amount of NIS 221,243,040 (reflecting a price per
share of NIS 8.5) (the “Purchase Price” and “The Exceptional Private Offer”,
respectively).
2. The Company’s
Undertakings during the Period Between Signing and Closing (the “Interim
Period”) –
The Company has committed, among other things:
a. To operate in the ordinary course of business during the Interim Period,
and to not allocate additional securities or distributing any dividends.
b.
To cooperate with the Purchaser for the purpose of consummating the
Transaction, including by conducting joint meetings with the Company’s
bondholders, as may be required.
c. the
Company may purchase, prior to the Closing Date, a Directors and Officers
liability insurance policy for a period of seven years insuring the directors
who will resign from the Board at the Closing Date.
3. Conditions
Precedent –
The consummation of the Transaction is subject to the fulfillment of the
following conditions precedent (the “Conditions Precedent”):
a.
The Company’s representations with respect to its incorporation and
organizational documents, the Company’s share capital and Allotted Shares, the
Company’s authority to enter into the Agreement and the required approvals to
consummate the Transaction (collectively, the “Fundamental Representations”)
shall be true and correct in all material respects as of the Closing Date.
b.
The Company’s representations which are not Fundamental Representations
shall be true and correct as of the Closing Date except where the failure of
such representations and warranties to be true and correct would not result in
a Specific Event, as defined below.
c.
The Purchaser’s representations shall be true and correct in all
material respects as of the Closing Date.
d.
The Company and the Purchaser shall have performed all their
undertakings and obligation pursuant to the Agreement, in all material
respects, provided that the Purchaser shall allow the Company a period of no
less than 30 days to cure a non-compliance with any such undertaking or
obligation.
e.
No legal or administrative proceedings shall have commenced against the
Company nor the Purchaser by any person, nor shall any person have threatened
in writing to commence any legal or administrative proceeding, with respect to
the prevention or restriction of the Transaction, nor shall any injunction,
temporary or permanent, shall have been issued which has or could have the
effect of limiting or restricting the Purchaser’s ownership or voting of the
Allotted Shares, nor shall there be any pending or threatened any suit seeking
the foregoing.
f.
The non-occurrence of any of the following events (each a “Specified
Event”):
I.
The operation of any of the satellites AMOS-3, AMOS-7 or AMOS-4 shall
have been (i) permanently suspended or (ii) temporarily suspended and such
temporary suspension is reasonably expected to continue for a consecutive
period of more than 180 days.
II.
The Company’s license issued by the Israeli Ministry of Communications
(the “MoC”) shall have been (i) permanently suspended or (ii) temporarily
suspended and such temporary suspension is reasonably expected to continue for
a consecutive period of more than 180 days.
III.
The Company is in default on any payment of interest or principal on any
series of the bonds issued by it, which constitute a cause for mandatory
prepayment under the applicable bond series, and such default was not cured by
the Company within the applicable cure periods specified in the applicable bond
series.
IV.
The Company filed for bankruptcy, or a court of competent jurisdiction
enters an order under the Israeli Companies Law, 5759-1999 or under the Israeli
Insolvency and Economic Rehabilitation Law, 5778-2018 against the Company, or
the occurrence of any other events indicating that the Company is insolvent.
V.
The Company’s contracts with the State of Israel or with D.B.S. DTV
Satellite Services (1998) Ltd. shall have been terminated or a notice of
termination (not subject to cure by the Company) shall have been provided.
g.
The receipt of the following third-parties approvals:
I.
The Company’s bondholders, if required.
II.
Regulatory approvals, including the MoC’s approval (collectively, the
“Regulatory Approvals”);
III.
The General Meeting of the Company’s shareholders;
IV.
The Tel Aviv Stock Exchange’s approval for the registration for trade of
the Allotted Shares.
h.
The resignation from the Board of all of the incumbent members of the
Board, except for the External Directors, the Independent Director and one of
the directors appointed by virtue of the Company’s shares held by Eurocom
Communication (1979)[2]
and the appointment to the Company’s Board of Directors of the five Directors
nominated by the Purchaser. If
any of the above Conditions Precedent is neither satisfied nor waived within
120 days of the execution of the Agreement, each of the Company and the
Purchaser shall be entitled to terminate the Agreement, provided, however that
the parties may extend the aforementioned period by additional period of up to
30 days in the aggregate in order to obtain the Regulatory Approvals, provided
further that in any event the Agreement shall terminate on February 28, 2022,
if Closing shall not occur earlier.
________________________________________________
[2]The current holder of controlling interest in the Company, which shares are held by a court appointed receiver (the “Receiver”), appointed by the Economic Court in Tel Aviv-Jaffa as of May 3, 2018. By virtue of holding more than 15% of the Company’s shares, the Receiver is entitled to a nomination of a director on its behalf in accordance with Section 111 to the Company’s Articles of Association.
4. Indemnification
of the Purchaser – The Agreement contains representations and
warranties of the parties as customary in transaction of the nature of the
Transaction. The Company’s representations and warranties shall expire at
the Closing, except for the representations with respect to the Company’s
share capital and authority to enter into the Agreement (both, the
“Fundamental Representations”), which will survive for a period of 30
months following the Closing (the “Indemnity Period”). The Company
undertook to indemnify the Purchaser during the Indemnity Period for any
breach of the Fundamental Representations following which the holding
ratio of the Purchaser in the Company’s share capital will decrease below
51% of the Company’s issued and outstanding share capital, on a partially
diluted basis. Such indemnification shall be made solely by the issuance
of additional shares to the Purchaser by the Company, in a manner which
will bring the Purchaser’s holding ratio of the Company’s share capital to
the aforementioned threshold.
In
addition, the Company undertook to indemnify the Purchaser for damages incurred
by the Company due to the occurrence of any of the following events (each an
“Indemnified Event”): (a) a final judgement against the Company in a claim
filed against it by the Government of Israel, as reported by the Company in an
immediate report dated February 26, 2020 or (b) the early termination of one of
the services agreement signed by and between the Company and the Government of
Israel. Such indemnification shall be made solely by the issuance of additional
shares by the Company to the Purchaser (with the issuance of additional shares
as compensation for the issuance’s dilutive effect on Purchaser’s holdings
ratio), up to an aggregate amount of 1,510,588 ordinary shares, representing an
indemnification cap of USD 4,000,000 (based upon the Transaction’s price per
share and a USD:NIS conversion ratio of 3.21). The indemnification amount shall
equal the product of (a) the Purchaser’s holding ratio of the Company’s share
capital at the time of occurrence of any such Indemnified Event and (b) the
damages incurred by the Company in connection with such Indemnified Event.
5. 4iG’s Undertaking. 4iG undertook to be liable for all of the Purchaser’s obligations under the Agreement, severally and jointly with the Purchaser.
6. Financing Term Sheet. The Purchaser had delivered to the Company a copy of a Term Sheet signed between the Purchaser and a financer, according to which at the Closing the Purchaser shall be provided with funding in an amount of EUR 39,000,000 dedicated to pay the Company the Purchase Price.
7. Termination Fee. If the Agreement will be terminated by either party (the “Breaching Party”) in spite of the fulfillment of the Conditions Precedent and the receipt of a written notice of the other party (the “Non-Breaching Party”) according to which it is willing to proceed to Closing and to fulfill all of its obligations pursuant to the Agreement, the Non-Breaching Party will be entitled to liquidated damages from the Breaching Party in an amount of NIS 21,300,000 (the “Termination Fee”). Upon the receipt of the Termination Fee by the Non-Breaching Party, such Termination Fee shall constitute sole and exclusive remedy of the Non-Breaching Party against the Breaching Party and its representatives, provided, however, that the Non-Breaching Party may elect not to demand the payment of the Termination Fee and in such case it shall be entitled to any other remedy or relief available to it under applicable law.
8. Agreement between the Purchaser and the Receiver. To Company’s knowledge, simultaneously with the execution of the Agreement, the Purchaser and the Receiver executed a Support Agreement according to which the Receiver undertook to vote in favor of the Transaction and the Exceptional Private Offer in the General Meeting of the Company’s shareholders.
The Company will publish, at such a time as prescribed by applicable law, an immediate report containing a summon to the General Meeting of the Company’s shareholders for the approval of the Exceptional Private Offer in accordance with the Private Offer Regulations.
It is hereby clarified that the consummation of the Transaction is subject to the fulfillment of the Conditions Precedent, including, but not limited to, the receipt of the Regulatory Approvals and other third parties approvals such as the General Meeting of the Company’s shareholders, which by their nature are not under the Company’s control. Accordingly, there is no certainty nor guarantee that the Transaction will be consummated.
Respectfully,
Space-communication Ltd.
By: Dan Zajicek, Chief Executive Officer
