TomTom announces its intention to raise EUR 430 million in a fully
committed/underwritten equity offering consisting of a EUR 359 million
rights offering (the "Rights Offering") and a EUR 71 million private
placement (the "Private Placement");
The net proceeds of the EUR 430 million equity offering will be
applied towards debt reduction;
TomTom and its lenders have agreed, conditional upon an equity
offering proceeding, an amendment to the terms of TomTom’s facility
agreement to provide TomTom greater headroom under its financial
covenants;
The four founders of TomTom (the "Founders") who currently in
aggregate hold approximately 51.5% of TomTom’s share capital (and will
hold approximately 47.2% following the Private Placement), will
participate in the Rights Offering for in aggregate approximately EUR
169 million, taking up their rights in full;
Janivo Holding B.V. ("Janivo") and Cyrte Investments B.V.
("Cyrte"), acting through an affiliate, will participate in the equity
offering for in aggregate EUR 100 million;
Alain De Taeye, founder of Tele Atlas and member of the TomTom
Management Board, will participate in the equity offering for in
aggregate EUR 1.5 million;
Mr. Joost Tjaden, managing director of Janivo, will join TomTom's
Supervisory Board upon completion of the Rights Offering;
TomTom will convene an Extraordinary General Meeting of
Shareholders (the “EGM”) to be held in Amsterdam on 30 June 2009, at
10:00 AM, for the purpose of, inter alia, approving the Private
Placement and the Rights Offering and the appointment of Mr. Joost
Tjaden to TomTom's Supervisory Board; and
TomTom will provide further details of the timetable for, and the
terms of the Rights Offering after the EGM.
Mr. Harold Goddijn, CEO of TomTom commented:
"We believe we have a compelling strategy to develop TomTom into
a broadly based navigation solutions company. The equity offering we
have announced today provides us with a substantially strengthened
balance sheet. We welcome Janivo and Cyrte as investors. Janivo
co-founded Tele Atlas and Cyrte brings complementary experience in
technology and communications. The Founders' and anchor investors'
commitment reiterates our strong conviction in the future of our
industry and our company."
Current trading update
TomTom notes that visibility on trading for the full year 2009 is
limited at present. TomTom also notes that it is satisfied with the
performance of the business in the months of April and May. Shipments of
unit volumes have been moderately below TomTom's expectations. ASP
(Average Selling Price) levels are above levels achieved in the first
quarter. TomTom has maintained its disciplined focus on cost control and
remains comfortable that current performance at the EBIT level is in
line with market expectations. TomTom will review this trading update
around the time of the Extraordinary General Meeting of Shareholders ("EGM")
to be held on 30 June 2009.
Proposed Equity Offering
TomTom intends to raise EUR 430 million in a fully
committed/underwritten equity offering (the "Equity Offering").
The Equity Offering will consist of a EUR 359 million rights offering
(the "Rights Offering") and a EUR 71 million private
placement (the "Private Placement").
Ordinary shares to be issued in the Private Placement will be issued at
a price of EUR 6.1234 per ordinary share, equal to the volume weighted
average price of TomTom's ordinary shares for the 10 trading days ending
on 12 June 2009. Ordinary shares to be issued in the Private Placement
will be issued prior to the record date for the Rights Offering and will
thus entitle its holders to participate in the Rights Offering.
The four founders of TomTom (the "Founders") will
participate in the Rights Offering for an aggregate amount of EUR 169.3
million. Janivo Holding B.V. ("Janivo") and Cyrte
Investments B.V. ("Cyrte"), acting through Flevo
Deelnemingen IV B.V., will participate in the Private Placement for an
aggregate amount of EUR 70 million (as a result of which they will in
aggregate control approximately 8% of TomTom's share capital) and will
participate in the Rights Offering for a further aggregate amount of EUR
30 million. Mr. Alain De Taeye will participate in the Private Placement
for an amount of EUR 1.05 million and will participate in the Rights
Offering for a further EUR 0.45 million.
ABN AMRO Bank N.V. (to be renamed The Royal Bank of Scotland N.V. in due
course), Deutsche Bank AG, London Branch, Goldman Sachs International,
ING Bank N.V. and Rabo Securities (the “Banks”)) have agreed to
underwrite, subject to certain customary conditions, the remainder of
the Rights Offering in an amount of EUR 159.2 million at market terms.
In connection with their commitments the Founders, Janivo, Cyrte and
Alain De Taeye will receive compensation on market terms equivalent to
the Banks.
TomTom has agreed with Janivo, Cyrte and Alain De Taeye to repurchase
the ordinary shares to be issued to them in the Private Placement for
consideration equal to the original issue price, should the Rights
Offering for whatever reason not be completed.
Cyrte is a Netherlands based investment manager, and part of the Delta
Lloyd group, with a strong track record and significant experience in
investing in technology businesses. Janivo also is a Netherlands based
investment manager, with an extensive track record, including being a
founding investor in Tele Atlas.
Structure of the Rights Offering
The Rights Offering will be structured as an issue of transferable
subscription entitlements (“SETs”), in which certain shareholders
of TomTom (the “Eligible Shareholders”) will be allowed to
participate.
Shareholders of TomTom who may not lawfully exercise SETs to acquire
shares in the proposed offering (including, but not limited to
shareholders who are located in the United States, Australia, Canada and
Japan), will not be deemed Eligible Shareholders and will not be able to
participate in the Rights Offering.
In connection with the Rights Offering and the Private Placement, TomTom
will publish a prospectus which will require the approval of the Dutch
Financial Markets Authority (Autoriteit Financiële Markten). If
the Rights Offering proceeds, the prospectus is expected to be published
as soon as practicable following the EGM. TomTom intends to issue
ordinary shares in the Private Placement and commence the Rights
Offering as soon as practicably possible following approval by the EGM
on 30 June 2009. Commencement of the Rights Offering is, however,
subject to the approval of the prospectus by the Dutch Financial Markets
Authority. Additional details regarding the timetable for, and terms of
the Rights Offering will be made available after the EGM.
Reasons for the Equity Offering
TomTom's Management Board and Supervisory Board have concluded that it
is in the shareholders’ (as well as in TomTom's other stakeholders')
best interests to substantially strengthen TomTom's capital structure
through the Equity Offering given the challenging market conditions.
TomTom will use the net proceeds of the Equity Offering to reduce its
indebtedness. In connection with, and conditional on TomTom having
received on or before 30 September 2009 net cash proceeds of an equity
offering of at least EUR 350 million, on 12 June 2009 TomTom and its
lenders agreed the terms of an amendment letter (the "Amendment
Letter"), amending the terms of TomTom’s facility agreement (the "Facility
Agreement") to provide TomTom greater headroom under its financial
covenants.
If the Amendment Letter does not remain effective, TomTom would be
subject to more onerous financial covenants and these covenants would be
retroactively applied to TomTom’s financial position as at 30 June 2009.
If TomTom was deemed to have been in breach of these more onerous
financial covenants on that date, TomTom’s lenders could demand
accelerated repayment of the outstanding debt under the Facility
Agreement. As a result TomTom might be required to pursue additional
alternative courses of action. Such courses of action may include (a)
implementing further restructuring measures, and/or (b) seeking to
obtain a sufficient amount of alternative equity or debt funding from
other sources, and/or (c) finding alternative ways of reducing TomTom's
debt levels such as by way of disposals of selected assets and/or
businesses, and/or (d) reducing capital expenditure, and/or (e) reducing
inventory.
Together with the actions TomTom has taken to reduce costs and maximise
cash generation, the Equity Offering and subsequent debt reduction will
strengthen TomTom's capital structure, reduce leverage and position
TomTom for future growth.
The amended Facility Agreement
Pursuant to the Amendment Letter, the financial covenant in the Facility
Agreement relating to our leverage has been amended so that we are
required to ensure that the ratio of our total consolidated net debt to
LTM EBITDA is no greater than 3.5x at 31 December 2009 and 30 June 2010,
is no greater than 3.0x at 31 December 2010, is no greater than 2.5x at
30 June 2011 and no greater than 2.0x thereafter.
The loan under the Facility Agreement (as amended by the Amendment
Letter) is required to be repaid in annual instalments of €210 million
on 31 December of each year with the final balance due on 31 December
2012, until which time it bears interest at a rate based on Euribor with
a spread that depends on certain leverage covenants with a minimum
spread of 1.5% and a maximum spread of 3.5%.
Our ability to issue certain convertible debt instruments within the
parameters set out in the amended Facility Agreement has also been
extended.
Extraordinary General Meeting of Shareholders
The EGM has been scheduled for the purposes of, inter alia,
approving the Rights Offering and the Private Placement, approving an
amendment to TomTom’s articles of association, inter alia, to
increase the authorised share capital and approving the appointment of
Mr. Joost Tjaden to TomTom’s Supervisory Board, conditional upon the
Rights Offering being completed. Copies of the agenda, the explanatory
notes, the Shareholders Circular and the proposed deeds of amendment of
our articles of association that have been prepared for the EGM may be
obtained, subject to certain restrictions, through our website
(investors.tomtom.com).
Further Information and audio web cast
Further information may be found on TomTom’s website, including certain
common questions and answers in respect of the Equity Offering. Please
see investors.tomtom.com.
The information for our audio web cast regarding the intended equity
offering is as follows:
Date and time: 15 June 2009 at 11:00 CET.
Please
see investors.tomtom.com.
TomTom is listed at Euronext Amsterdam in the Netherlands
ISIN:
NL0000387058 / Symbol: TOM2
About TomTom
TomTom is a leading provider of navigation solutions and digital maps.
In the five years from the launch of its first personal navigation
device (“PND”) in early 2004, close to 30 million people around the
world have purchased a TomTom PND, and over 45 million PNDs were powered
by Tele Atlas digital maps. In addition to producing PNDs, TomTom
develops navigation systems and services for car manufacturers, offers
professional navigation solutions for commercial vehicle fleets, and
produces and sells digital maps and dynamic content. TomTom believes
that this range of products and services uniquely positions it to
deliver navigational products and services to a wide variety of
different customer groups.
This document does not constitute an offer to sell, or the
solicitation of an offer to acquire or subscribe for, securities of
TomTom in the United States, Australia, Canada, Japan, their territories
and possessions, or any other jurisdiction in which such offer or sale
of securities would be unlawful.
The securities of TomTom have not been and will not be registered
under the US Securities Act of 1933, as amended (the “Securities Act”).
Accordingly, the securities of TomTom may not be offered or sold in the
United States absent registration or an applicable exemption from
registration under the Securities Act. No public offering of the
securities of TomTom is being made in the United States.
No communication or information relating to any offer or sale of
securities of TomTom may be disseminated to the public in jurisdictions
where prior registration or approval is required for that purpose. No
action will be taken that would permit an offer of securities of TomTom
in any jurisdiction where action for that purpose is required, other
than in The Netherlands.
The release, publication or distribution of this announcement in
certain jurisdictions may be restricted by law and therefore persons in
such jurisdictions into which this announcement is released, published
or distributed, should inform themselves about, and observe such
restrictions.
This announcement does not constitute a prospectus. Any offer to
acquire securities pursuant to a proposed offering will be made, and any
investor should make his investment, solely on the basis of information
that will be contained in the prospectus to be made generally available
in The Netherlands in connection with such offering. When made generally
available, copies of the prospectus may be obtained at no cost through
the website of Euronext Amsterdam N.V. (Dutch residents only) and the
website of TomTom.
This communication is directed only at (i) persons outside the United
Kingdom, subject to applicable laws, or (ii) within the United Kingdom,
persons having professional experience in matters relating to
investments who fall within the definition of “investment professionals”
in Article 19(5) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 or (iii) within the United Kingdom,
high net worth companies, unincorporated associations and partnerships
and trustees of high value trusts as described in Article 49(2) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order
2005. Any investment or investment activity to which this communication
relates is available only to and will be engaged in only with such
persons. Persons within the United Kingdom who receive this
communication (other than persons falling within (ii) and (iii) above)
should not rely on or act upon this communication.
This document contains certain forward-looking statements relating to
the business, financial performance and results of TomTom and the
industry in which it operates. These statements are based on TomTom’s
current plans, estimates and projections, as well as its expectations of
external conditions and events. In particular the words “expect”,
“anticipate”, “estimate”, “may”, “should”, “believe” and similar
expressions are intended to identify forward looking statements.
Forward-looking statements involve risks and uncertainties that could
cause actual results to differ materially from those in the
forward-looking statements. These include, but are not limited to: the
level of consumer acceptance of existing and new and upgraded products
and services; the growth of overall market demand for TomTom’s products
or for personal navigation products generally; TomTom’s ability to
sustain and effectively manage its recent rapid growth; and TomTom’s
relationship with third party suppliers, and its ability to accurately
forecast the volume and timing of sales. Additional factors could cause
future results to differ materially from those in the forward-looking.
Financial Community
Richard Piekaar, +31 20 757 5194
ir@tomtom.com