Corem Property Group: The Board of Directors of Corem has resolved to carry out a directed issue of ordinary shares of Class B, of in total approximately SEK 1,020 million

The Board of Directors of Corem Property Group AB (publ) ("Corem" or the "Company") has, in accordance with the  press release published by the Company on 17 July 2024, conducted a so called accelerated book-building procedure and resolved to carry out a directed share issue of in total 106,206,165 ordinary shares of Class B in the Company, at a price of SEK 9.6 per ordinary share of Class B, whereby Corem receives in total approximately SEK 1,020 million before the deduction of transaction costs (the "Directed Issue"). Nordea Bank Abp, filial i Sverige ("Nordea"), Skandinaviska Enskilda Banken AB (publ) ("SEB") and Swedbank AB (publ) ("Swedbank") are Joint Global Coordinators and Joint Bookrunners in connection with the Directed Issue.

The Directed Issue

According to the resolution by the Board of Directors, the Directed Issue shall be carried out through two separate resolutions on share issues, partly as a directed issue of 77,560,333 ordinary shares of Class B, pursuant to the authorisation to issue shares granted by the Annual General Meeting held on 23 April 2024, through an accelerated book-building procedure targeting Swedish and international institutional and other professional investors ("Tranche 1"), and partly as a directed issue of 28,645,832 ordinary shares of Class B, subject to the subsequent approval of an extraordinary general meeting of the Company, directed to M2 Asset Management AB (publ) ("M2") and Gårdarike AB ("Gårdarike") ("Tranche 2").

The subscription price in the Directed Issue is SEK 9.6 per ordinary share of Class B and is based upon an accelerated book-building procedure carried out by Nordea, SEB and Swedbank. The subscription price represents a discount of approximately 3.5 per cent against the volume-weighted average price (VWAP) of the ordinary share of Class B during the last ten trading days (SEK 9.95) and a discount of 6.8 per cent in relation to the closing price of the ordinary share of Class B on Nasdaq Stockholm on 17 July 2024. Since the subscription price has been determined through an accelerated book-building procedure, it is the Board of Directors' assessment that the subscription price will reflect prevailing market conditions and demand and that the subscription price therefore is marketable.

Subscribers of the shares in Tranche 1 are existing shareholders as well as new Swedish and international institutional and other professional investors, such as Alcur Fonder, Handelsbanken Fonder and Länsförsäkringar Fondförvaltning.

The new issue in Tranche 2 shall, in accordance with the Board of Directors' resolution, be directed to Corem's two largest shareholders, M2, owned by Rutger Arnhult, and Gårdarike, owned by Urban Terling. Rutger Arnhult is a board member and the CEO of Corem. Urban Terling is an employee of Corem. The new issue in Tranche 2 is thus directed to persons falling under the category of related parties pursuant to Chapter 16 of the Swedish Companies Act (2005:551), entailing that, in order for the resolution on the share issue to be valid, a subsequent general meeting of shareholders in the Company, at which no less than nine-tenths of both the votes cast and the shares represented at the general meeting, need to approve the Board of Directors' resolution in the new issue pursuant to Tranche 2. The Board of Directors' resolution on the new issue pursuant to Tranche 1 is not dependent on Tranche 2 being approved at the extraordinary general meeting. The Board of Directors have proposed that an extraordinary general meeting approves the Board of Directors' resolution on the share issue in Tranche 2 on or around 14 August 2024. Corem's two largest shareholders Rutger Arnhult (through M2) and Gårdarike, who together hold approximately 47.1 per cent of the total number of shares outstanding and 62.8 per cent of the total number of votes outstanding in Corem, taking into account Tranche 1, have undertaken to vote in favor of the Board of Directors' proposal on approval of the Board of Directors' resolution regarding Tranche 2. Notice of the extraordinary general meeting will be published in a separate press release around 18 July 2024. 

In respect of the directed issue pursuant to Tranche 2, Rutger Arnhult, board member and the CEO, has neither participated in the Board of Directors' preparation, the resolution to issue new shares nor in the resolution to allocate the shares. Rutger Arnhult has also not participated in the pricing of the offer within the accelerated book-building procedure which preceded the Board of Directors' resolution to issue the shares, and has only participated in the Directed Issue in order for the Company to obtain sufficient subscription at the prevailing subscription price.

Background and reasons

Corem is a commercial real estate company with a focus on sustainable ownership, management and development of properties. The portfolio currently consists of 295 investment properties with 2,317 thousand square meters of leasable area and a value of SEK 56,101 million. The property portfolio is well concentrated geographically, located in metropolitan areas and growth areas. The last few years have been transaction-intensive for Corem Divestments have been carried out as a tool to strengthen Corem's long-term financial capacity, while the Company has strengthened its balance sheet by both amortizing bank debt and redeeming bonds. The Directed Issue is part of proactively strengthening Corem's financial position and the Board of Directors considers it a priority to further strengthen the balance sheet and interest coverage ratio, improve cash flow and increase financial flexibility. The net cash from the Directed Issue is intended to create conditions for Corem to continue to reduce outstanding hybrid loans and bonds and thereby reduce the Company's interest costs. Overall, this will result in lower costs, greater financial flexibility and a strengthened long-term financial position.

Deviation from the shareholders' preferential rights

The Company's Board of Directors has made an overall assessment and carefully considered the possibility of raising capital through a new issue with preferential rights for the Company's shareholders. The Board of Directors considers that the reasons for deviating from the shareholders' preferential right are (i) that a rights issue would take a significantly longer time to complete and entail a higher risk for an adverse effect on the share price, particularly in light of the current market volatility and the challenging market conditions, (ii) to, as far as Tranche 1 is concerned, diversify and strengthen the Company's shareholder base with institutional and other professional investors, which is expected to ultimately increase the liquidity of the Company's share, and (iii) to carry out a directed issue can be made at lower costs and with less complexity than a rights issue. Furthermore, the reason why certain existing shareholders have been included among those entitled to subscribe is that the shareholders in question have expressed and shown interest in long-term ownership in the Company, which the Board of Directors believes creates security, stability and favorable conditions for the Company's growth and is thus considered to be beneficial to both the Company and all shareholders.

Considering the above, the Board of Directors has made the assessment that a directed issue of ordinary shares of Class B with deviation from the shareholders' preferential right is the most favorable alternative for Corem to carry out the capital raise and is in the best interests of all shareholders. The Board of Directors therefore considers that the reasons for the Directed Issue outweigh the main rule that new issues should be carried out with preferential rights for shareholders.

Provided that the new issue pursuant to Tranche 2 is approved at the extraordinary general meeting, the total number of shares outstanding in the Company will, after the completion of the Transaction, amount to 1,243,489,446, of which 93,730,797 are ordinary shares of Class A, 1,129,797,545 are ordinary shares of Class B, 7,545,809 are ordinary shares of Class D, and 12,415,295 are preference shares. After the completion of the Directed Issue, the total amount of shares outstanding in the Company will increase by 106,206,165 ordinary shares of Class B, and the total amount of votes outstanding in the Company will increase by a total of 10,620,616.5 votes, from 191,598,920.4 votes outstanding to 202,219,536.9 votes outstanding. The share capital will increase by a total of SEK 212,412,330 from SEK 2,274,566,562 to SEK 2,486,978,892. The Transaction thus entail a dilution for existing shareholders of a total of approximately 8.5 per cent of the number of shares outstanding and a total of approximately 5.3 per cent of the number of votes outstanding in the Company.

The settlement date for Tranche 1 is estimated to be around 22 July 2024. The settlement date for Tranche 2 is estimated to be around 16 August 2024.

Lock-up undertakings

In connection with the Transaction, the Company has undertaken not to, inter alia, on customary terms, issue additional shares in the Company for a period of 90 calendar days after completion of the Directed Issue. In addition, the Company's Board of Directors and senior management have undertaken not to, inter alia, on customary terms, transfer or dispose of their shares in the Company during a period commencing on the execution of the lock-up undertakings up to an including 22 October 2024.

Financial and legal advisors

Nordea, SEB and Swedbank are Joint Global Coordinators and Joint Bookrunners in connection with the Transaction. Walthon Advokater AB act as legal advisor to Corem and Roschier Advokatbyrå AB acts as legal advisor to the Joint Global Coordinators and the Joint Bookrunners in connection with the Transaction.

Corem Property Group AB (publ)

For further information, please contact

Patrik Essehorn, chairman of the Board of Directors, + 46 (0) 70-882 03 75, patrik.essehorn@walthon.se

Eva Landén, deputy CEO, +46 (0)10-482 76 50, eva.landen@corem.se

Corem Property Group AB (publ)

Box 56085, SE-102 17 Stockholm

Visit: Riddargatan 13 C

Corp ID no: 556463-9440

www.corem.se

Corem Property Group AB (publ) is a real estate company that sustainably owns, manages and develops commercial properties in metropolitan and growth areas. Corem Property Group AB (publ) is listed on Nasdaq Stockholm, Large Cap. Further information is available at www.corem.se.

This disclosure contains information that Corem Property Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the above contact persons, on 18 July 2024 at 02:45 CEST.

This press release has been published in Swedish and English. In the event of any discrepancy between the language versions, the Swedish language version shall prevail.

IMPORTANT INFORMATION

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subscribe for any securities issued by the Company in any jurisdiction, where such offer or such

invitation would be considered illegal or require registration or other measures.

This press release does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein may not be sold in the United States absent registration or an exemption from registration under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There is no intention to register any securities referred to herein in the United States or to make a public offering of the securities in the United States. The information in this press release may not be announced, published, copied, reproduced or distributed, directly or indirectly, in whole or in part, within or into the United States, Australia, Japan, Canada, or in any other jurisdiction where such announcement, publication or distribution of the information would not comply with applicable laws and regulations or where such actions are subject to legal restrictions or would require registration or other measures than what is required under Swedish law. Actions taken in violation of this instruction may constitute a crime against applicable securities laws and regulations.

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In the United Kingdom, this document and any other materials in relation to the securities described herein is only being distributed to, and is only directed at, and any investment or investment activity to which this document relates is available only to, and will be engaged in only with "qualified investors" who are (i) persons having professional experience in operations relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the British Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); or (ii) high net worth individuals as referred to in Article 49(2)(a)-(d) of the Order (all such persons together being referred to as "relevant persons"). In the United Kingdom, any investment or investment activity to which this communication relates is available only to, and will be engaged in only with, relevant persons. Persons who are not relevant persons should not take any action on the basis of this press release and should not act or rely on it.

This press release does not identify, or purport to identify, the risks (direct or indirect) that may be associated with an investment in the Company's shares. Any investment decision to acquire or subscribe for new shares in the Transaction must be made on the basis of all publicly available information relating to the Company and the Company's shares. Such information has not been verified by Joint Global Coordinators and Joint Bookrunners. Joint Global Coordinators and Joint Bookrunners act exclusively for the Company in connection with the Transaction and no one else. Joint Global Coordinators and Joint Bookrunners will not be responsible to anyone other than the Company for providing the protections afforded to its clients nor for giving advice in relation to the Transaction or any other matter referred to herein.

This press release does not constitute a recommendation for any investors' decisions regarding the Transaction. Each investor or potential investor should conduct an examination on their own, analysis and evaluation of the business and information described in this press release and any publicly available information. The price and value of the securities can decrease as well as increase. Achieved results do not provide guidance for future results. Neither the contents of the Company's website nor any other website accessible through hyperlinks on the Company's website are incorporated into or form part of this press release.

Failure to follow these instructions may result in a breach of the Securities Act or applicable laws in other jurisdictions.

Forward-looking statements

This press release contains forward-looking statements that reflect the Company's intentions, assessments, or expectations regarding the Company's future results, financial position, liquidity, performance, prospects, anticipated growth, strategies and opportunities and the markets in which the Company operates. Forward-looking statements are statements that do not relate to historical facts and may be identified by the inclusion of words such as "believe", "expect", "anticipate", "intend", "estimate", "will", "may", "assume", "should", "could", and in each case, their negative, or similar expressions. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that the assumptions reflected in these forward-looking statements are reasonable, it cannot be guaranteed that they will materialize or prove to be correct. Because these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements as a result of many factors. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The Company does not guarantee that the assumptions underlying the forward-looking statements in this press release are free from errors and readers of this press release should not place undue reliance on the forward-looking statements in this press release. The information, opinions and forward-looking statements that are expressly or implicitly contained herein speak only as of the date of this press release and are subject to change. Neither the Company nor anyone else undertake to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this press release, unless this is required under law or Nasdaq Stockholm's rulebook for issuers.

Information to distributors

In order to comply with the product governance requirements contained in: (a) Directive 2014/65/EU of the European Parliament and of the Council on markets in financial instruments, as consolidated, ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593, which complements MiFID II; and (c) national implementing measures (together, the "MiFID II Product Governance Requirements") and to disclaim any extra-contractual, intra-contractual or other liability to which any "manufacturer" (within the meaning of the MiFID II Product Governance Requirements) may otherwise be subject, the shares of Corem have been subject to a product approval process, which has determined that those shares are: (i) suitable for a target market consisting of retail investors and investors meeting the criteria of professional clients and eligible counterparties, as defined in MiFID II (the "Positive Target Market"); and (ii) suitable for distribution through all distribution channels permitted under MiFID II. Distributors should note that: the price of Corem's shares may fall and investors may lose all or part of their investment; Corem's shares are not subject to any guarantee of return or capital protection, and an investment in Corem's shares is only suitable for investors who are not in need of a guaranteed return or capital protection and who (alone or with the assistance of an appropriate financial or other adviser) are capable of evaluating the merits and risks of such investment and have sufficient resources to bear the losses that may result from such investment. Conversely, an investment in the shares of Corem is not suitable for investors who need full capital protection or full repayment of the amount invested, cannot bear any risk or who require a guaranteed or predictable return (the "Negative Target Market", and together with the Positive Target Market, the "Target Market"). The Target Market assessment is without prejudice to any other requirements regarding contractual, legal or regulatory sales restrictions in relation to the Transaction. Furthermore, it should be noted that notwithstanding the Target Market assessment, the Joint Global Coordinators and Joint Bookrunners will only provide investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the shares in Corem.

Each distributor is responsible for undertaking its own target market assessment in respect of the shares in Corem and determining appropriate distribution channels.