Metacon secures full subscription of TO1 warrants

Metacon announced that the company has secured full subscription for its outstanding TO1 warrants through a combination of subscription intentions and guarantee commitments. The exercise price for the warrants has been set at SEK 0.09. Given that the current share price is trading significantly above this level, we see a strong likelihood that the warrants will be subscribed without substantial reliance on guarantors. We have already incorporated full warrant subscription at an exercise price of SEK 0.09 into our estimates, so we are not making any adjustments to our estimates or valuation at this time.

In Q1’24, Metacon completed a rights issue of units, where each unit consisted of six shares and two TO1 warrants. Each warrant entitles the holder to subscribe for one new share in the company. Metacon recently confirmed that the exercise price for the warrants has been set at SEK 0.09, with a subscription period running from March 7, 2025, to March 21, 2025. To secure full subscription, the company has received subscription intentions from certain board members and executives and entered into guarantee commitments with existing shareholders. No compensation is paid for subscription intentions, which account for 2.5% of the outstanding warrants. However, guarantee commitments, covering 97.5% of the warrants, include a 10% compensation fee paid in newly issued shares at the same SEK 0.09 exercise price.

With full warrant exercise, the number of shares will increase by approximately 114.9 million to 1,352.4 million, resulting in a dilution of around 8.5%. This would provide Metacon with approximately 10.3 MSEK before issuance costs.

A stronger cash position is key to delivery execution

We have already factored full warrant subscription at SEK 0.09 into our estimates. As we expect liquidity to remain tight until June/July 2025, when we anticipate the release of a significant portion of restricted cash from previously announced orders, it is crucial for Metacon to secure full warrant subscription to support delivery execution. Therefore, we view Metacon’s efforts to ensure full subscription positively, and the terms appear reasonable. Shares issued under guarantee commitments will be allocated through a directed share issue, the size of which depends on the extent to which warrant holders exercise their rights. Given that the current share price is significantly above the warrant exercise price, we see strong potential for high exercise rates, which would minimize the size of the potential share issue.