Decision from the Administrative Court in Malmö regarding sale-leaseback transaction for production facilities in Sweden

Reference is made to the stock exchange announcement by Borgestad ASA (the “Company” and, together with its consolidated subsidiaries, the “Group”) published on 27 October 2023 regarding the conditional agreement entered into with Bjuv municipality in Sweden for the sale and leaseback of two properties in Sweden, where the Group’s production plant and other production facilities for refractory products are located (the “Transaction”), the stock exchange announcement published by the Company on 11 December 2023 regarding the approval of the Transaction by Bjuv municipality, and the stock exchange announcement published by the Company on 8 January 2024 regarding a compliant over said approval.

The complaint relates to the purchase price in the Transaction, which in the claimant’s opinion significantly exceeds the market value of the two properties.

The Administrative Court in Malmö (the “Administrative Court”) has now processed the complaint. According to the Administrative Court, Bjuv municipality has not provided sufficient documentation regarding the valuation of the two properties. As a result, the Administrative Court has decided to revoke Bjuv municipality’s approval of the Transaction.

The Company has been informed that Bjuv municipality will appeal the Administrative Court’s ruling.

As stated in the stock exchange announcement published on 8 January 2024, Bjuv municipality’s approval of the Transaction will only become binding once the complaint has been finally resolved in the claimant’s disfavour, and the completion of the Transaction is conditional upon such binding approval. Consequently, the Transaction can only be completed if the Administrative Court’s ruling is overturned (i.e. not upheld) in the appeal process.