Scatec Solar - EGM 12 November 2020
In general, Scatec Solar is in compliance with the Norwegian regulations relating to the organisation and procedures of the General Shareholders Meeting.
Under ITEM 5, the Board of Directors asks for the authorization to issue 6,884,198 shares (4.5%) reserved to the shareholder Scatec SA (12.9%) to partly finance the acquisition of SN Power from Norfund, which was financed through the private placement of 20,652,478 Scatec Solar's shares (15%) completed on October 20. ECGS strongly regrets that the company has not made publicly available the methodologies used to calculate the value of SN Power or any independent advisors' fairness opinion on the transaction, since it involved several related parties. However, it should be noted that the only effect of the resolution will be the repayment of Scatec SA's share loan in shares rather than in cash. Furthermore, in ITEM 6, it is proposed to authorize a second private placement reserved to all those shareholders that did not participate in the first one, at the same conditions, in order to restore the right of all shareholders to avoid dilution of their position. Therefore, ECGS recommends to vote FOR.
Under ITEM 7, the Board of Directors seeks authority to increase the share capital by up to 10% without pre-emptive rights. Although the terms of the authority meet ECGS' guidelines, we note that it is the third similar authorization requested by the company since April 2020, for an aggregate of up to 30% of the share capital. Furthermore, concerns may arise over the use of the authorizations to carry out significant transactions with related parties without the prior approval of shareholders. ECGS therefore recommends to vote OPPOSE.
Scatec Solar ASA is a Norway-based integrated independent solar power producer. It develops, builds, owns, operates and maintains solar power plants, and has several projects under development in Africa, the United States, Japan, Brazil the Middle East and Europe. The Company has three operating business segments: Power Production (PP), Operation & Maintenance (O&M), and Development & Construction (D&C). The PP segment comprises the Kalkbult and Linde plants in South Africa, the ASYV plant in Rwanda and four plants in the Czech Republic. The O&M includes services provided to solar power plants in which Scatec Solar participates or to third party plants constructed by the Company. The D&C comprises development activities as well as construction of solar power plants developed by Scatec Solar.
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