Crayon Group Holding AS – 17.12 2014
Summary
ISIN NO 0010714595
Summary
FRN Crayon Group Holding AS Senior Secured Callable
Bond Issue 2014/2017
NO 0010714595
Manager
17.12 2014
Prepared according to Commission Regulation (EC) No 486/2012 article 1 (10) - Annex XXII
Crayon Group Holding AS – 17.12 2014
Summary
ISIN NO 0010714595
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
A.1
Warnings
Comments
This summary should be read as an introduction to the
Prospectus.
Any decision to invest in the Bonds should be based on
consideration of the Prospectus as a whole by the
investor.
Where a claim relating to the information contained in
the Prospectus is brought before a court, the plaintiff
investor might, under the national legislation in its
Member State, have to bear the costs of translating
the Prospectus before the legal proceedings are
initiated.
A.2
Resale and final placement by financial
intermediaries
Section B — Issuer and any Guarantor
Element
Disclosure requirement
B.1
Legal and commercial name of the Issuer
and Guarantors
Civil liability attaches only to those persons who have
tabled the summary including any translation thereof,
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.
Not applicable. No resale will take place. No financial
intermediaries will be used for the final placement of
the Bonds.
Comments
Issuer:
The legal name of the Company is Crayon Group
Holding AS, and the commercial name is Crayon
Group Holding.
Guarantors:
Legal name
Crayon Group AS
Crayon AS
Inmeta Consulting AS
Crayon A/S
Crayon AB
Crayon Oy
Crayon Limited
B.2
Domicile and legal form of the Issuer, the
legislation under which the Issuer
operates and its country of incorporation
Commercial name
Crayon Group
Crayon
Inmeta
Crayon
Crayon
Crayon
Crayon
Crayon Group Holding AS is a Norwegian Limited
Liability Company regulated by the Norwegian
Companies Act and supplementing Norwegian laws
and regulations. The Company is registered in the
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Crayon Group Holding AS – 17.12 2014
Summary
ISIN NO 0010714595
Norwegian Companies Registry with registration
number 997 602 234. The Company’s registered
business address is Sandakerveien 114 A, 0484 Oslo,
Norway.
Crayon Group AS is a Norwegian Limited Liability
Company regulated by the Norwegian Companies Act
and supplementing Norwegian laws and regulations.
The company is registered in the Norwegian
Companies Registry with registration number 981 125
592. The company’s registered business address is
Sandakerveien 114 A, 0484 Oslo, Norway.
Crayon AS is a Norwegian Limited Liability Company
regulated by the Norwegian Companies Act and
supplementing Norwegian laws and regulations. The
company is registered in the Norwegian Companies
Registry with registration number 991 124 810. The
registered business address is Sandakerveien 114 A,
0484 Oslo, Norway.
Inmeta Consulting AS is a Norwegian Limited Liability
Company regulated by the Norwegian Companies Act
and supplementing Norwegian laws and regulations.
The company is registered in the Norwegian
Companies Registry with registration number
977 302 390. The company’s registered business
address is Sandakerveien 114 A, 0484 Oslo, Norway.
Crayon A/S is a Danish Limited Liability Company
regulated by the Danish Companies Act and
supplementing Danish laws and regulations. The
company is registered in the Danish Companies
Registry with registration number 28 71 61 84. The
company’s registered business address is Ellekær 9,
1.sal, 2730 Herlev, Denmark.
Crayon AB is a Swedish Limited Liability Company
regulated by the Swedish Companies Act and
supplementing Swedish laws and regulations. The
company is registered in the Swedish Companies
Registry with registration number 556635-9799. The
company’s registered business address is Landsvägen
50, 172 63 Sundbyberg, Sweden.
Crayon Oy is a Finnish Limited Liability Company
regulated by the Finnish Companies Act and
supplementing Finnish laws and regulations. The
company is registered in the Finnish Companies
Registry with registration number 2096054-3. . The
company’s registered business address is Valimotie 27
A, 4krs, 00380 Helsinki, Finland.
Crayon Limited is a British Limited Liability Company
regulated by the British Companies Act and
supplementing British laws and regulations. The
company is registered in the British Companies
Registry with registration number 04055519. . The
company’s registered business address is York House,
18 York Road, Maidenhead, Berkshire, SL6 1SF,
England.
B.4b
Known trends affecting the issuer and the
There are no known trends, uncertainties, demands,
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Crayon Group Holding AS – 17.12 2014
Summary
ISIN NO 0010714595
industries in which it operates.
B.5
A description of the group and the issuer’s
position within the group.
Simplified legal structure:
B.9
Profit forecast or estimate
B.10
Qualifications in the audit report
B.12
Selected historical financial information,
statement regarding no material adverse
change and significant changes in the
financial or trading position.
commitments or events that are reasonably likely to
have a material effect on the Issuer's or any
Guarantors prospects for at least the current financial
year.
The Issuer is a holding company of the Group.
Not applicable. No forecasts or estimates are made
public.
Not applicable. There are no qualifications in the
audited financial reports.
Crayon Group Holding AS issued in July 2014 a
NOK 650 million Bond Issue with maturity in July
2017.
Other than the above mentioned, there is no
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. And there has
been no material adverse change in the prospects
of the Issuer or Guarantors since the date of its last
published audited financial statements.
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Crayon Group Holding AS – 17.12 2014
Summary
ISIN NO 0010714595
Selected financial information for the Group:
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Crayon Group Holding AS – 17.12 2014
Summary
ISIN NO 0010714595
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Crayon Group Holding AS – 17.12 2014
Summary
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Crayon Group Holding AS – 17.12 2014
Summary
ISIN NO 0010714595
Note: In 2012 Crayon Limited changed its fiscal year ending from end-April to end-December.
Hence the financial information in the 2012 annual report is provided on an 8 months basis.
B.13
Recent events particular to the issuer which
are to a material extent relevant to the
evaluation of the issuer’s solvency.
Not Applicable – There are no recent events
particular to the issuer which are to a material
extent relevant to the evaluation of the issuer’s
solvency.
B.14
Description of dependencies upon other
entities within the group
As the Company is a holding company, all business
operations of the Company are carried out by the
Company's subsidiaries. Therefore, the profit the
Company makes it dependent on the results of
operations of the Company's subsidiaries. The
Company is hence dependent on its subsidiaries.
B.15
A description of the issuer’s principal
activities.
Crayon Group is a license partner for a range of
software manufacturers. It offers licenses from
Microsoft, Adobe, Symantec, Citrix, VMware,
Oracle, IBM and others. The emphasis is towards
standard software which customers use
consistently year after year, and which play a key
role in their technological platforms and critical
commercial processes.
B.16
Description of ownership of the company.
The Issuer is partially owned by the Group’s employees (40.5 %) and partially by Norvestor Holding
I AS (59.5 %). The Company’s four major shareholders, who own more than 5 % of the share
capital, are:
Name
Related officer
Shareholding
Norvestor Holding I AS
59.50 %
Sevencs AS
Rune Syversen
7.99 %
Rugz II AS
Jens Rugseth
7.96 %
Frank Mortensen Holding AS
Frank Mortensen
5.20 %
There are no arrangements known to the Issuer, the operation of which may at a subsequent date
result in a change in control of the issuer.
The owners of Norvestor Holding I AS are KLP (16,7%) and Norvestor VI (83,3%) which is advised
by Norvestor Equity. Norvestor is a member of the Norwegian Venture Capital Association (NVCA),
the Swedish Private Equity and Venture Capital Association (SVCA) and the European Private Equity
and Venture Capital Association (EVCA).
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Crayon Group Holding AS – 17.12 2014
Summary
ISIN NO 0010714595
CRAYON GROUP AS is a fully owned subsidiary of Crayon Group Holding AS.
CRAYON AS is a fully owned subsidiary of Crayon Group AS.
INMETA CONSULTING AS is a fully owned subsidiary of Crayon Group AS.
CRAYON A/S is fully owned subsidiary of Crayon Group AS.
CRAYON AB is a fully owned subsidiary of Crayon Group AS.
CRAYON OY is a fully owned subsidiary of Crayon Group AS.
CRAYON LIMITED is a fully owned subsidiary of Crayon Group AS.
B.17
Credit ratings
B.18
The nature and scope of the guarantee
Section C — The Bonds
Element
Disclosure requirement
C.1
Type and class of securities being offered
/ security identification numbers
C.2
Currency
C.5
Restrictions on free transferability
C.8
A description of the rights including
ranking and limitations to those rights
attached to the Bonds.
Not Applicable – Neither the Company , Guarantors
nor the Bonds have been rated.
To the extent legally possible and subject to any
limitations required by mandatory provisions of
law, joint and several unconditional and irrevocable
on-demand guarantees (No: påkravsgaranti) from
the Guarantors to the Secured Parties in respect of
the Secured Obligations, which shall constitute
senior obligations of the Guarantors.
Comments
Senior Secured Callable Bond issue with floating rate –
ISIN NO 0010714595
Norwegian kroner
Not Applicable - The Bonds are freely transferable
The Bond Agreement has been entered into between
the Borrower and the Trustee. The Bond Agreement
regulates the Bondholder’s rights and obligations in
relations with the issue. The Trustee enters into this
agreement on behalf of the Bondholders and is granted
authority to act on behalf of the Bondholders to the
extent provided for in the Bond Agreement.
When bonds are subscribed / purchased, the
Bondholder has accepted the Bond Agreement and is
bound by the terms of the Bond Agreement.
Status:
The Bonds shall be senior debt of the Issuer, secured
on a first priority basis over the Security Interest, and
otherwise rank at least pari passu with the claims of its
other creditors, except for (i) the super senior
Revolving Credit Facility and any Permitted Hedging
Obligations entered into with a Hedge Counterparty
which will receive proceeds from any enforcement of
the Security Interest and certain distressed disposals
prior to the Bonds (however otherwise rank pari passu
in right of payment) in accordance with the waterfall
provisions of the Intercreditor Agreement, and (ii)
obligations which are mandatorily preferred by law.
The Bonds shall rank ahead of subordinated capital.
Security:
All amounts outstanding to the Bond Trustee (on
behalf of the bondholders) under the Finance
Documents, including but not limited to principal,
interest, fees and expenses, shall (subject to any
mandatory limitations under applicable law) be
secured by the Security Interests. Any Group Company
becoming an Additional Security Provider shall have a
30 day period to arrange for such Security to be
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Crayon Group Holding AS – 17.12 2014
Summary
ISIN NO 0010714595
provided following delivery of the relevant Compliance
Certificate by the Issuer to the Bond Trustee.
The Pre-Disbursement Security, and any additional
Security as permitted under paragraph (b) of the
definition of "Permitted Security", shall be shared
between the Secured Parties in accordance with the
terms of the Intercreditor Agreement.
All amounts outstanding under the RCF Finance
Documents shall be secured by the Pre-Disbursement
Security.
Any New Debt and/or Permitted Hedging Obligation
may be secured by the Pre-Disbursement Security,
which shall be shared between the Secured Parties in
accordance with the terms of the Intercreditor
Agreement, and any additional security as permitted
under paragraph (b) of the definition of "Permitted
Security".
The Revolving Credit Facility shall (together with any
Permitted Hedging Obligations) rank super senior to
the Bonds and any New Debt with respect to proceeds
of enforcement of Security Documents and certain
distressed disposals.
C.9
Information on the interest rate, interest
payment dates, installments and
representative of the bondholders
The Bonds are issued with floating rate, 3 months
NIBOR pluss 5.00 percentage points per annum.
Interest payments shall be made in arrears on the
Interest Payment Dates each year, 10 January, 10
April, 10 July and 10 October each year and the
Maturity Date, 10 July 2017.
The Bonds shall be repaid by the Issuer in full on the
Maturity Date at a price equivalent to the sum of
100.00% of par value.
The Issuer shall have the right, at its option, to repay
up to 10% of the Initial Loan Amount (or, if there have
been any Tap Issues, 10% of the sum of the Initial
Loan Amount and the total amounts raised under any
Tap Issues) each year (the “Optional Prepayment”).
The repayment per Bond shall be the aggregate of (i)
102% of the Face Value to be repaid, and (ii) accrued
but unpaid interest on the repaid amount.
Any unutilized part of the Amortization amount in a
calendar year may be subsequently utilised in a later
calendar year.
C.10
In case the Bonds have a derivative
component in the interest payment, a
description of potential impacts on the
Bonds value is affected by the value of the
underlying instrument.
C.11
An indication whether the Bonds will be
listed on a regulated market.
The Bonds trustee is Nordic Trustee ASA.
The coupon payments, which depend on the 3 months
NIBOR interest rate and the Margin, will vary in
accordance with the variability of the NIBOR interest
rate. The interest rate risk related to this bond issue
will be limited, since the coupon rate will be adjusted
quarterly according to the change in the reference
interest rate (NIBOR 3 months) over the 3 year tenor.
An application for listing of the Bonds will be sent Oslo
Børs.
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Crayon Group Holding AS – 17.12 2014
Summary
Section D — Risks
Element
Disclosure requirement
D.2
Key information on the key risks that are
specific to the issuer.
ISIN NO 0010714595
Comments
Please refer to the Registration Document dated 17.12
2014 for a listing of specific risk factors. The below is
only an extract and intended to show key risk factors.
Economic risk: The Group is exposed to the economic
cycle and macro economical fluctuations.
Supplier risk: The Group is to a large degree
dependent on its main suppliers, Microsoft, IBM,
Oracle and other software vendors.
Competition: The industry in which the Group
operates is competitive.
Customer risk: Although the Group has a large, welldiversified customer base at the date of this Company
Presentation, the sales volumes related to the existing
contracts, or the loss of contracts for whatever reason,
may have significant negative impact on the Group’s
financial results.
Insurance risk: The Group’s insurance may not
necessarily cover all potential liabilities of the Group.
Dependence on key personnel: The development of
the Group is dependent on its access to qualified
personnel, in particular key management positions and
consultants.
Operational gearing and loss of revenue: The
Group’s cost base is to a large extent salaries and the
cost base is thereby to be viewed as medium term
fixed costs. Any decline in revenue will to a large
extent affect net results before taxes in the same
magnitude as the gross contribution from such lost
revenue.
Intellectual property risks: The Group has only to a
limited extent protected its intellectual property
related to its services. Competitors may consequently
copy some of the Group’s products and services, which
in turn may have a negative effect on the Group’s
business.
Legal claims/legal matters: The Group is from time
to time involved in disputes in the ordinary course of
its business activities
Taxation risks: The Group is exposed to risk
regarding the correct application of tax regulations, for
example related to inter-company transfer pricing
arrangements, as well as possible future changes in
the tax legislation, including potential different
application of the tax rules by the authority compared
to what the Group considers to be correct.
Risks related to international operations:
Operations in international markets are subject to risks
inherent in international business activities, including,
in particular, general economic conditions in each such
market, overlapping differing tax structures, currency
fluctuations, management and organization spread
over various jurisdictions, unexpected changes in
regulatory requirements, and complying with a variety
of foreign laws and regulations.
Collection of receivables risk The Group has a
significant amount of trade receivables, and is
dependent on being able to collect such receivables.
Liquidity risk: Liquidity risk is the risk that the Group
will not be able to meet its financial obligations as they
fall due. Any failure by the Group to set aside sufficient
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Crayon Group Holding AS – 17.12 2014
Summary
ISIN NO 0010714595
liquidity or any unexpected liquidity needs may have a
material adverse impact on the Group and may require
the Group to sell assets they would otherwise not sell
and/or to inferior prices to raise liquidity.
Risk relating to obtaining further financing: The
Group requires substantial long term liquidity to
finance working capital and capital expenditure for its
operations.
Risk of being unable to repay the Bonds: During
the lifetime of the Bonds, the Group will be required to
make payments on the Bonds. The ability to generate
cash flow from operations and to make scheduled
payments on the indebtedness, including the Bonds,
will depend on future financial performance.
Defaults or insolvency of subsidiaries: Defaults by,
or the insolvency of, certain subsidiaries of the Group
could result in the obligation of the Group to make
payments under parent company financial or
performance guarantees in respect of such
subsidiaries’ obligations, or cause cross-defaults on
certain borrowings of the Group. There can be no
assurance that the Group and its assets would be
protected from any actions by the creditors of any
subsidiary of the Group, whether under bankruptcy
law, by contract or otherwise.
Insolvency of the Company As the Company is
incorporated under the laws of Norway, an insolvency
proceeding relating to the Company, even if brought in
another jurisdiction, would likely involve Norwegian
insolvency laws, the procedural and substantive
provisions of which may differ from comparable
provisions of those of other jurisdictions with which
investors are familiar.
D.3
Key information on the key risks that are
specific to the Bonds.
Please refer to the Securities Note dated 17.12 2014
for a listing of specific risk factors. The below is only
an extract and intended to show key risk factors.
Following the issuance of the Bonds, the Company will
have substantial indebtedness which could have
negative consequences for the bondholders as:
(i) the Company’s ability to obtain additional financing
for working capital, capital expenditure, asset
acquisitions or general corporate purposes and its
ability to satisfy its obligations under the Bonds may
be impaired in the future;
(ii) the Company may be more vulnerable to general
adverse economic and industry conditions;
(iii) the Company may be at a competitive
disadvantage compared to its competitors with less
indebtedness or comparable indebtedness at more
favorable interest rates and as a result, it may not be
better positioned than its competitors to withstand
economic downturns; and
(iv) the Company’s ability to refinance indebtedness
may be limited or the associated costs may increase.
The trading price of the Bonds may be volatile:
Historically, the market for non-investment grade debt
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Crayon Group Holding AS – 17.12 2014
Summary
ISIN NO 0010714595
has been subject to disruptions that have caused
substantial volatility in the prices of securities similar
to the Bonds.
Risks related to the market for the Bonds: The
Bonds are a new issue of securities with no established
trading history.
Risks related to transfer restrictions on the
Bonds: The Group is relying upon exemptions from
registration under the U.S. Securities Act, applicable
state securities laws, Canadian securities law and UK
and EU securities laws in the placement of the Bonds.
As a result, in the future the Bonds may be transferred
or resold only in a transaction registered under or
exempt from the registration or prospectus
requirements of such legislation. Therefore, investors
may not be able to sell their Bonds at their preferred
time or price. The Group cannot assure investors as to
the future liquidity of the Bonds and as a result,
investors bear the financial risk of their investment in
the Bonds.
The Bonds may not be a suitable investment for
all investors: Each potential investor in the Bonds
must determine the suitability of that investment in
light of its own circumstances.
The Bonds may be subject to optional
redemption by the Company, which may have a
material adverse effect on the value of the
Bonds.
The terms and conditions of the bond agreement
will allow for modification of the Bonds or
waivers or authorizations of breaches and
substitution of the Company which, in certain
circumstances, may be affected without the
consent of bondholders.
Enforcement of rights as a bondholder across
multiple jurisdictions may prove difficult It may
be difficult or impossible for bondholders to bring an
action against the Group or the assets of the Group.
Change of control - the Company’s ability to
redeem the Bonds with cash may be limited
Upon the occurrence of a Change of Control Event (as
defined in the bond agreement), each individual
bondholder shall have a right of pre-payment of the
Bonds plus all accrued and unpaid interest to the date
of redemption together with a prepayment premium
established in the bond agreement. However, it is
possible that the Company will not have sufficient
funds at the time of the Change of Control Event to
make the required redemption of Bonds. The
Company’s failure to redeem tendered Bonds would
constitute an event of default under the bond
agreement.
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Crayon Group Holding AS – 17.12 2014
Summary
ISIN NO 0010714595
Section E — Offer
Element
Disclosure requirement
E.2b
Use of proceeds.
Comments
The Initial Loan Amount (net of fees and legal costs of
the Manager and the Bond Trustee and any other costs
and expenses incurred in connection with the Bond
Issue) shall be applied as follows:
(a) NOK 315,651,495 for repayment of the
Existing Shareholder Loan;
(b) NOK 223,000,000 for repayment of the
Existing Senior Loan;
(c) NOK 62,700,000 for repayment of the Existing
Mezzanine Loan; and
(d) NOK 48,648,505 (net of fees and costs
including legal costs of the Manager and the
Bond Trustee and any other costs and
expenses incurred in connection with the Bond
Issue) for repayment of accrued interest on
the above-mentioned loans, costs incurred in
connection with the Bond Issue and general
corporate purposes of the Group.
E.3
Terms and conditions of the offer
E.4
Material interests in the offer
The proceeds from any Tap Issue shall be used for
Permitted Acquisitions and for general corporate
purposes of the Group (including Permitted
Distributions).
Not Applicable – The Bonds have not been subject to a
public offer, it is already issued and settled.
The involved persons in Crayon Group Holding AS have
no interest, nor conflicting interests that is material to
the Issue.
Crayon Group Holding AS has mandated ABG Sundal
Collier Norge ASA as Manager for the issuance of the
Loan. The Manager has acted as advisor to Crayon
Group Holding AS in relation to the pricing of the Loan.
E.7
Estimated expenses charged to the
investor
The Manager and/or any of their affiliated companies
and/or officers, directors and employees may be a
market maker or hold a position in any instrument or
related instrument discussed in this Securities Note,
and may perform or seek to perform financial advisory
or banking services related to such instruments. The
Manager corporate finance departments may act as
manager or co-manager for this Borrower in private
and/or public placement and/or resale not publicly
available or commonly known.
Not Applicable – The investor of the Bonds were not
charged any expenses due to the issuance of the
Bonds
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