Kernel clears up additional emission worth USD 60 mln exclusively for qualified investors

As of July 31, 2023, the credit portfolio of the Kernel group of companies exceeded USD 1.4 billion. Kernel is currently in the process of restructuring a significant portion of its debt, the company informs in a statement for investors, explaining the additional emission expected shortly.

"Creditors have presented several conditions, one of which is to raise equity capital of at least USD 60 million. On August 18, 2023, we announced this creditor requirement, and on August 21, 2023, the Board of Directors decided to issue additional shares," the message reads.

The company has decided to issue shares exclusively among existing shareholders who are evidently willing to support the company in the long term. Additionally, the low probability of attracting external investors to the company was taken into account, given the ongoing missile attacks on the company’s assets by russia.

Furthermore, considering the anticipated future delisting of the company’s shares, new shares will not be admitted to trading on the exchange. For these reasons, the company has declined a public share offering to external investors.

Kernel initiated the share issuance solely among so-called “qualified” investors. This decision fully complies with EU legislation and is a common European market practice that allows for swift share issuance without the need for prospectus preparation, extensive financial and legal costs, market intermediaries, roadshows, and the like. All “qualified” investors who submitted their applications have the right to participate in the capital-raising auction. EU law prohibits the participation of “non-qualified” investors in such cases.

The company has previously conducted three additional share issuances after its IPO in November 2007. Each time, the issuance took place exclusively with the participation of “qualified investors” within 1-2 days book building. No complaints or objections from minority shareholders have ever been received, the company adds.

"The possibility of additional share issuance in case of necessity has been in existence since September 23, 2022, when extraordinary shareholder meeting adopted relevant decisions precisely for such purposes — the ability to swiftly raise capital as needed, taking into account the unpredictability of the situation in Ukraine."

Kernel admits that many of its shareholders have incurred losses on investments in the company’s shares due to the sharp decline in share price following the full-scale invasion.