Announcement of secondary public offering, listing and trading of shares of AS LHV Group

AS LHV Group (registry code 11098261, registered address Tartu mnt 2, 10145 Tallinn; the LHV) hereby announces a secondary public offering of LHV’s shares (the Offering). The Offering will be carried out based on the public offering, listing and admission to trading prospectus registered by the Estonian Financial Supervision Authority (the EFSA) on 9 September 2019 which has been published on the date of this announcement on the websites of LHV and the EFSA, as may be supplemented. (the Prospectus). The terms and conditions of the Offering are described in the Prospectus.

LHV also informs that in connection with preparations for the Offering, LHV has supplemented the consolidated interim report for the 6-month period, ending on 30 June 2019, published to the investors on 16 July 2019 (the Interim Report). The Interim Report reviewed by independent auditors have been appended to the Prospectus and is also available on LHV’s website investor.lhv.ee. The additions do not relate to financial position or income statement of the group and are further described in Note 1 to the Interim Report.

Key terms of the Offering

The Offering is based on the resolution of the General Meeting of shareholders of LHV, adopted on 21 August 2019, resolving to increase the share capital of LHV by issuing 2,200,000 new ordinary shares with nominal value of EUR 1 (the Offer Shares). The shareholders of the LHV have a preferential right to subscribe for new shares for a period of two weeks as of the start of the subscription period for the Offer Shares (the Subscription Right). The list of persons (shareholders) entitled to use the preferential right was determined as at the close of business for the Nasdaq CSD securities settlement system on 4 September 2019 and on that basis, 2 188 157 Subscription Rights will be issued. The Subscription Rights will be recorded under ISIN EE3700080726 and will be transferred on 10 September 2019 at the latest to the same securities accounts where the shares were registered on 4 September 2019 at the end of the business day of ERS settlement system.

LHV has applied for the listing and admission to trading of the Subscription Rights on Baltic Main List of the Nasdaq Tallinn Stock Exchange. Trading with the Subscription Rights is expected to commence on 11 September 2019 and will conclude on 23 September 2019. Persons who have not been shareholders of LHV before, may acquire Subscription Rights from the Nasdaq Tallinn Stock Exchange. Provided the Offering is not cancelled, each Subscription Right will entitle the investor to subscribe to and receive in allocation 1 Offer Share.

The Subscription Period commences on 11 September 2019 at 10:00 local time in Estonia and terminates on 25 September 2019 at 16:00 local time in Estonia (the Subscription Period). The Offer Price is EUR 11.5 per one Offer Share, of which EUR 1 is the nominal value of one Offer Share and EUR 10.5 is the issue premium (the Offer Price).

The Offer Shares are only offered publicly in Estonia and there will not be any public offering in any other jurisdiction. The Offering comprises of an offering to retail investors in Estonia and of an offering to institutional investors in and outside of Estonia to qualified investors within the meaning of Article 2(e) of the European Union Prospectus Regulation No 1129/2017/EU and other types of investors in reliance on certain exemptions available under the laws of each jurisdiction where the Offering is being made.

The Company will decide on the allocation of the Offer Shares after the expiry of the Subscription Period on or about 26 September 2019. No Offer Shares shall be allocated or issued to persons who do not hold Subscription Rights on 25 September 2019 at the end of the business day of the settlement system of Nasdaq CSD SE.

Once the Offer Shares are registered with the Estonian Commercial Register, the Offer Shares will rank pari passu with all the existing Shares and will be registered in the Estonian Register of Securities operated by Nasdaq CSD (the ERS) under ISIN EE3100073644.

An investor wishing to subscribe for the Offer Shares should contact a custodian that operates such investor’s ERS securities account and submit a subscription undertaking, detailing the information as set out below:

The subscription undertaking will be forwarded to Nasdaq CSD SE. Due to the technical process used in distributing the Offer Share, the Subscription Undertaking must detail the information of the Subscription Rights (and not the Offer Shares). The Subscription Undertaking must be submitted to the custodian by the end of the Subscription Period. The investor may use any method that such investor’s custodian offers to submit the Subscription Undertaking (e.g. physically at the client service venue of the custodian, over the internet or by other means).

Listing and admission to trading of the Offer Shares

In connection with the Offering, LHV plans to apply for the listing and the admission to trading of the Offer Shares on the Baltic Main List of the Nasdaq Tallinn Stock Exchange. It is estimated that trading with the Offer Shares will commence on or about 14 October 2019 following the registration of the Offer Shares at the Estonian Commercial Register.

Availability of the Prospectus

The Prospectus in the English language and the translation of the Prospectus summary into the Estonian language can be obtained in electronic format on the website of the EFSA (www.fi.ee) and on the website of LHV (http://investor.lhv.ee) throughout the Subscription Period. In addition, the Prospectus and the translation of the summary into the Estonian language are also available via the information system of Nasdaq Tallinn Stock Exchange.

Key dates of the Offering

Indicative timetable of the Offering is the following:

For further information, please contact:
Priit Rum
LHV Communications Manager
Phone: +372 502 0786
E-mail: priit.rum@lhv.ee

Important information:

This announcement is an advertisement of securities within the meaning of EU Prospectus Regulation No 2017/1129/EU and does not constitute or form a part of any offer or solicitation to purchase or subscribe for the Offer Shares. Before making an investment decision, we kindly ask the investors to read the Prospectus, the summary of the Prospectus and, if necessary, consult with a person specialising in advising on such investments. Any offer to acquire the Offer Shares will be made, and any investor should make his investment, solely on the basis of information that is contained in the Prospectus.

Public offering will be carried out only in Estonia. There is no public offering in any jurisdiction where such offering or sale would be unlawful before registration or qualification of the laws of such jurisdiction. LHV has not registered and does not intend to register the Offering nor the Offer Shares in the United States of America and does not intend to carry out a public offering in the United States of America.

Resolutions of the Special General Meeting of AS LHV Group

The special general meeting of shareholders of AS LHV Group, held today in Hilton Tallinn Park Hotel "Ballroom I" hall (Fr. R. Kreutzwaldi St 23), decided to increase the share capital of AS LHV Group.

A total of 126 shareholders participated and were represented at the meeting, with their corresponding shares representing a total of 17,515,569 votes. This means 66,72% of the votes determined by shares were represented at the meeting.

The notice on calling the special general meeting was published in the stock exchange information system and on LHV website on 30 July 2019. On the same date, the notice was printed in the Eesti Päevaleht daily newspaper.

1. Overview of economic performance for the first seven months of 2019
   The management provided the shareholders with an overview on the economic results for the first seven months of 2019, that have been disclosed:

   • January results
   • February results
   • Interim report of 1st quarter
   • April results
   • May results
   • Interim report of 2nd quarter
   • July results

2. Overview of the long-term financial forecast
   The management provided the shareholders with an overview on the Group’s adjusted long-term financial forecast.
   The special general meeting of the shareholders of AS LHV Group resolved:

3. Increase of the share capital
   The general meeting unanimously resolved to increase share capital of the Group by EUR 2,200,000 through the issuing of new ordinary shares under the following terms and conditions:

   i to issue 2,200,000 ordinary shares with a nominal value of EUR 1, as a result of which the new amount of share capital will be EUR 28,454,079;
   ii the shares will be issued with a share premium. The nominal value must be paid for each share, which is EUR 1, and the lower limit of the share premium is EUR 10.50, with it being possible for the Supervisory Board to assign a higher share premium by the start of share subscription, at the latest;
   iii The shareholders of the Group have the right of pre-emption for new shares for a period of two weeks as of the start of the subscription period for shares. A circle of individuals (shareholders) entitled to use the right of pre-emption shall be determined as at the close of business for the Nasdaq CSD securities settlement system on 4 September 2019;
   vi The Group’s shareholders, who have been entered in the list of shareholders as at the fixed day, shall each be granted 1 (one) right of pre-emption for every existing 12 shares. The subscription to each new share requires 1 (one) right of pre-emption. If the number of shares in the possession of the shareholder does not grant them the right to subscribe to a whole number of shares, the number of subscribed shares shall be rounded to the nearest mathematical whole number, whereas fractions under one shall be rounded to one;
   v the trading period for rights of subscription for shares – 11 September 2019 until 23 September 2019, whereas the terms and conditions for trading with rights of subscription for shares are set forth in the public offer prospectus and listing particulars published prior to the start of the tender (Prospectus);
   vi new shares shall be distributed exclusively amongst individuals holding subscription rights as at the close of business for the Nasdaq CSD securities settlement system on 25 September 2019;
   vii subscription and payment for new shares shall take place in accordance with the procedure set forth in the Prospectus during the period 11 September 2019 – 25 September 2019;
   viii new shares shall be distributed in accordance with their subscription orders, but not more than the corresponding individual’s pre-emptive right to subscribe to shares. In the case of an amount that exceeds the quantity indicated, the shares shall be divided in proportion to the pre-emptive rights belonging to subscribers (but not in excess of the number of shares subscribed for by the corresponding individual);
   ix if it appears that share subscription exceeds the number of shares being offered under the current decision, then the number of shares subscribed for shall be divided proportionally between subscribers based on the pre-emptive rights belonging to the subscribers. In the event that the subscribed shares are not divided exactly between subscribers, the Group’s Supervisory Board shall make the final decision on the division of subscribed shares between subscribers. The Group’s Supervisory Board decides on the cancellation of oversubscribed shares. In the event that all of the new shares have not been fully subscribed by the term specified in the decision, the Group’s Management Board shall have the right to extend the subscription period or cancel any shares that have not been subscribed for during the subscription period. The specific rules governing the allocation of new shares are prescribed in the Prospectus;
   x newly issued shares will provide the right to a dividend starting in the 2019 financial year.

   The minutes of the General Meeting shall be published not later than within 7 (seven) days from the date of the General Meeting on the website of AS LHV Group investor.lhv.ee.

LHV Group is the largest domestic financial group and capital provider in Estonia. LHV Group's key subsidiaries are LHV Pank and LHV Varahaldus. LHV employs more than 420 people, and more than 182,000 customers use LHV’s banking services. Pension funds managed by LHV have more than 177,000 active clients.