Bawat Water Technologies AB (“Bawat” or the “Company”) a Danish based maritime Greentech engineering company committed to the creation and commercialisation of a more environmentally friendly solution to the problem of ballast water, hereby publishes its prospectus and announces the price of the offering (the “Offering”) and listing of its shares on Nasdaq First North Premier Growth Market in Stockholm. Nasdaq Stockholm AB has made the assessment that the Company fulfils the applicable listing requirements, provided that certain customary conditions are met. The first day of trading is expected to be March 28, 2022. Upon full subscription of the Offering, Bawat will receive SEK 44.9 million before costs. A group of existing shareholders and new investors have undertaken to acquire Units in the Offering for an amount of SEK 23.3 million. Furthermore, depending on the result of the Offering, The Danish Green Investment Fund (Danmarks Grønne Investeringsfond) and the Danish Maritime Fund (Den Danske Maritime Fond) will set off previous loans amounting up to SEK 21.3 million against new shares in the Company at a subscription price corresponding to the Offering share price. Bawat announced its intention to list its shares on Nasdaq First North Premier Growth Market on January 19, 2022.
The Offering in brief
The Offering consist of 2,300,000 Units. Each Unit consist of three (3) new shares in Bawat and one (1) warrant of series TO1 (together “Units”).
The subscription price is SEK 19.5 per Unit, corresponding to SEK 6.5 per share and a Company valuation of approximately SEK 200 million before the Offering. The warrants of series TO1 are issued free of charge.
The Offering also includes an option to issue up to 1,150,000 additional Units in case of oversubscription (the “Oversubscription Option”).
Upon full subscription of the Offering, Bawat will receive SEK 44.9 million before costs related to the Offering. If the full Oversubscription
Option is utilized, Bawat will receive an additional SEK 22.4 million in proceeds before cost.
Each warrant of series TO1 entitles the holder to subscribe for one (1) new share in the company during a 14-day period following the publication of the Company’s Q1 2023 report.
The exercise price for the warrants of series TO1 will correspond to 70 percent of the Volume Weighted Average Price (VWAP) of Bawat’s shares on Nasdaq First North Premier Growth Market in the ten-day period leading up to two trading days before the publication of the Company’s Q1 2023 report but at least SEK 6.2 and not more than SEK 13.
If all the warrants of series TO1 are exercised, the Company may receive up to an additional SEK 44.9 million before costs. Hence, the total proceeds to Bawat from the Offering, including warrants of series TO1 and the Oversubscription Option could amount up to SEK 112.13 million before costs.
Certain existing shareholders, including members of the board of directors and senior management, and a group of new investors have undertaken to subscribe Units in the Offering for an amount of SEK 23.3 million, corresponding to 52% of the Offering.
Immediately following the announcement of the result of the Offering, the Danish Green Investment Fund and the Danish Maritime Fund will set off previous loans amounting up to SEK 21.3 million against new shares in the Company at a subscription price corresponding to the Offering share price.
Existing shareholders in Bawat holding more than 5% and members of senior management have agreed not to sell any shares held immediately prior to the Offering for a period of twelve (12) months after the first day of trading.
The prospectus is available from today March 1, 2022, and will be passported to Denmark, Norway, and Finland from March 2, 2022.
The subscription period runs from March 3 through March 17, 2022, both days included.
The new shares will be issued under the ISIN code SE0017487424. The warrants of series TO1 will be issued under ISIN code SE0017563265.
The first day of trading in the shares and warrants of series TO1 on NASDAQ First North Premier Growth Market is expected to be March 28, 2022. The shares and the warrants of series TO1 will be trading under the trading symbol BAWAT.
Background to the Offering
The full implementation of IMO’s Ballast Water Management Convention from September 2024 effectively means that all new merchant ships today (approximately 1,700 new builds worldwide per year) will be delivered with a ballast water treatment system on board. Another approximately 40,000 existing ships will need to have a ballast water treatment system retrofitted over the coming years. Furthermore, the Company believes harbours around the world will see an advantage in being able to offer port-side ballast water treatment services for ships that for one reason or another cannot comply. Bawat is active in all three market segments which the Company estimates represent a combined market opportunity of at least USD 10 billion.
Bawat estimates that more than EUR 18 million in total has been spent since 2011 to develop its heat-based system. The technical risks of the solution have been eliminated and the first commercial sale took place in 2019, with good subsequent market traction and additional installations despite the corona pandemic. However, to truly capture the opportunity presented by the uniqueness of Bawat’s solution, more capital is needed to strengthen, among other things, the Company’s sales- and marketing functions. Furthermore, in a global business-to-business market, a strong balance sheet combined with the transparency and reputation benefits offered by a public listing, will in the board’s opinion strengthen Bawat’s competitive position.
The proceeds of the Offering of SEK 44.9 million before cost will be applied to the Company’s commercial objectives under the following headlines (in order of priority):
Sales and marketing (approximately 50-60% of the Offering)
Most of the proceeds from the Offering will be directed towards expanding the Company’s global sales network to ensure brand name recognition and technology awareness across all relevant regions. This requires a combination of investments into hiring additional sales and marketing personnel and the continued development of the Company’s indirect sales channels, including its international network of sales agents.
Investments (approximately 20-25% of the Offering)
Although it is an important part of the Company’s business strategy to operate an asset light business model, the Company will make selected investments into containerized shore-based systems in support of the Company’s innovative service model. These investments will be made to make sure the already identified demand for rental equipment is met as soon as possible.
Organisation (approximately 10-15% of the Offering)
A smaller amount of the proceeds from the Offering will be used to cover for the cost of growing a technical back-up and execution organisation.
If the Oversubscription Option and the warrants of series TO1 lead to further proceeds of up to SEK 67.3 million before cost, the Company will utilise those additional proceeds to further ramp up its sales and marketing activities.
Source: Bawat Water Technologies AB