NYAB proceeds with preparing re-domiciliation and transferring listing from Finland to Sweden

Translation: Original comment published in Finnish on 9/28/2023 at 7:31 am EEST

NYAB announced on Wednesday that its Board of Directors has concluded to proceed with the re-domiciliation process, which will benefit its shareholders. NYAB is now also considering delisting its shares from First North Finland in connection with the re-domiciliation and simultaneously listing its shares on First North Premier Sweden but no final decision on this has been made. The company expects to publish a formal cross-border conversion plan before the end of 2023.

The company proceeds with preparations for re-domiciliation to Sweden

NYAB announced earlier in June that it was considering re-domiciling its parent company from Finland to Sweden and a potential simultaneous transfer of the listing or dual listing of its shares on Nasdaq Stockholm in Sweden (see our comment here). Following a feasibility analysis, NYAB announced on Wednesday that its Board of Directors has concluded to proceed with the re-domiciliation process, which will benefit its shareholders.

The re-domiciliation process is planned to be executed as a cross-border conversion. In this context, NYAB’s legal form would be converted to a Swedish public limited liability company without being dissolved or liquidated whose registered office and headquarter would be in Luleå, Sweden. According to the company, this is expected to have a limited impact on NYAB’s daily business operations, employees, and financial position. The ownership structure of the converted company would be identical to the ownership structure of NYAB immediately before the completion of the cross-border conversion and NYAB’s shares would be converted into shares of the re-domiciled company in proportion to the existing shareholdings. Based on official feedback from Finnish and Swedish tax authorities, the conversion should not result in direct tax consequences for NYAB or its Finnish and Swedish shareholders.

NYAB considers deleting shares from Finland and focusing the listing on Sweden

NYAB is now also considering delisting its shares from First North Finland in connection with the re-domiciliation and simultaneously list its shares on First North Premier Sweden but no final decision on this has been made. According to the company, the listing in Sweden is expected to improve the liquidity of the share compared to Finland and reduce costs and complexity compared to the previously considered dual listing. The re-domiciliation and listing are also expected to improve NYAB’s access to capital markets. In addition, most of NYAB’s business consists of the Swedish business, and listing in Sweden is estimated to be beneficial to the company in a commercial sense and to enhance its recognition. Most NYAB’s shares are also held by Swedish shareholders, which it says partially supports the transfer of the listing to Sweden. However, the company emphasized that Finland would remain an important market for its operations (incl. personnel and customers) also in the future. However, it says that a listing in Sweden would bring it closer to the largest customers and geographical markets and support implementation of the growth strategy.

Formal decisions are planned to be published later this year

The company expects to publish a formal cross-border conversion plan before the end of 2023. The cross-border conversion and subsequent listing transfer are contingent on, e.g., final resolutions by NYAB’s Board of Directors regarding the formal cross-border conversion plan, resolutions by NYAB’s EGM, and applicable regulatory approvals and processes. The EGM is scheduled to be held in Q1’24, and the cross-border conversion and the listing transfer are expected to be completed during H1’24. At the same time, the company said that conditions for a potential offering of shares in NYAB may be explored in connection with the re-domiciliation to facilitate sufficient distribution and orderly trading in NYAB’s shares on First North Premier Sweden.

The preparations were quite expected

We feel the decision to advance the preparations for the transfer of domicile and listing in Sweden were quite expected, considering the previously communicated plans and the current business and ownership structure. Also, a possible focus of the listing on Sweden alone did not come as a total surprise based on the company’s comments in June, considering the additional costs and complexity of a dual listing (incl. workload). Although no final decisions have been made, we consider it quite likely that the company will proceed in the manner now communicated (i.e. by focusing the listing on Sweden). However, the promotion of preparations does not affect our forecasts or view of the company.