XXL ASA ("XXL" or the "Company") is in need of short-term liquidity in order not to breach its financial covenants despite its topline growth in the first quarter of 2025, as well as continued growth with approximately 4% quarter to date in the second quarter (unaudited).
Frasers Group plc (“Frasers”) has offered to provide the Company with a NOK 200 million shareholder loan (the “Shareholder Loan”) or to provide a NOK 200 million guarantee as security for a new bridge loan from the Company’s lending banks (the “Bridge Loan”). The offer is conditional upon the following conditions (the “Support Conditions”): (i) XXL receiving waivers from financial covenants in its bank facilities per 31 May 2025, (ii) an exemption being granted from the change of control provisions under the bank facilities that would otherwise be triggered should Frasers become the owner of shares representing more than 50% of the votes in XXL, and (iii) an authorization being granted by the Company’s annual general meeting that may be used to resolve the Private Placement (as defined below).
The Company is planning a private placement of new shares at NOK 10 per share to raise gross proceeds in the amount of minimum NOK 160 million and maximum NOK 200 million (the “Private Placement”) to repay the above bridge financing. Frasers has offered to underwrite the minimum amount of the Private Placement, subject to being allocated at least 16 million new ordinary shares in the Company and the Support Conditions being satisfied.
CHALLENGING SHORT TERM LIQUIDITY SITUATION
The net proceeds from the rights issue completed in March 2025 not used to repay the Company's then outstanding bridge loan have been used for working capital investments and further execution of the "Reset&Rethink" strategy. However, XXL is now experiencing a challenging liquidity situation as a result of the tax reimbursement from Swiss tax authorities in the amount of CHF 5.2 million not being received in May 2025 as expected by the Company, and with no clear indications from the tax authorities as to when the payment will be received. Following the successful conclusion of an international Mutual Agreement Procedure (MAP) and Advance Pricing Agreement (APA) between Norway and Switzerland, XXL Europe GmbH is currently in litigation with cantonal tax authorities regarding the implementation of the agreed MAP/APA outcomes for Swiss income tax purposes, and legal actions have been initiated to expedite the tax assessment and refund processes.
Further, the Company is experiencing supply chain delays, causing delays in deliveries of bikes and thus slower topline growth than anticipated. This situation has resulted in higher-than-expected working capital requirements for the group.
XXL did on that basis initiate discussions with its largest shareholders and lending banks to bridge the short-term liquidity needs, and has received an offer from Frasers for a solution comprising the Bridge Loan guarantee or the Shareholder Loan, and an underwritten Private Placement, subject to satisfaction of the Support Conditions. The Company is in a constructive dialogue with the lending banks and Altor regarding the Support Conditions, but agreements with these parties are yet to be reached.
THE MANDATORY OFFER FROM FRASERS – UPDATED RECOMMENDATION
In its statement announced on 5 May 2025 on Frasers' NOK 10 per share Offer, the Company's board of directors (the “Board”) advised shareholders to carefully review their options in light of the factors set out in the statement and any other available information, and, taking into account the shareholder's investment outlooks and the reduced liquidity of the XXL shares, to make an independent evaluation regarding whether or not to accept the Offer. The need for short-term liquidity in order not to breach the Company’s financial covenants per 31 May 2025 has arisen after the date of the statement referred to above, and the fact that a solution to the liquidity shortfall has been offered by Frasers but that the Support Conditions have not been satisfied or waived are factors that shareholders should take into consideration when considering the NOK 10 per share Offer from Frasers.
Further, the Board was prior to giving its statement on the Offer on 5 May 2025 informed that Altor had decided not to accept the Offer. Altor has now informed the Board that Altor reserves its right to accept the Offer, but that no final decision in that respect will be made until 27 May 2025. Altor holds 23,491,568 A shares (33.33% of the A shares) and 17,051,037 B shares (100% of the B shares), in total 40,542,605 shares, corresponding to 46.32% of the total number of shares in XXL. Should Altor decide to accept the Offer, then Frasers will become the owner of more than two-thirds of the shares and votes in the Company. The uncertainty as to whether Altor (and other large shareholders) will accept the Offer, and the effects of such acceptances, if given, is also a factor that should be taken into consideration when considering the Offer.
Given the uncertainties and other factors referred to above, the Board recommends that shareholders accept the NOK 10 per share Offer made by Frasers.
The Board has been informed that Board member Ronny Blomseth and deputy Board member Thomas Brandsdal (employee representative) have decided to accept the Offer. The Board has not been informed that other primary insiders have changed their decision relating to acceptance of the Offer.
The extended acceptance period for the Offer expires 16:30 CEST on 27 May 2025.
For further queries, please contact:
Investor Relations
Tolle O. R. Grøterud
Tel: +47 90 27 29 59
E-mail: ir@xxlasa.com
Press contact
Jan Christian Thommesen
Tel: + 47 918 21 387
E-mail: presse@xxl.no
This information is considered to be inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. This stock exchange announcement was published by Tolle O. R. Grøterud, Investor Relations Officer at XXL ASA, on 26 May 2025 at 21:45 CEST.
ABOUT XXL
ASA XXL is a leading sports retailer with stores and e-commerce in Norway, Sweden and Finland. It is the largest among the major sports retailers in the Nordics. XXL pursues a broad customer appeal, offering a one stop shop experience with a wide range of products for sports, hunting, skiing, biking and other outdoor activities. XXL’s concept is to have the largest stores with the best prices and the widest assortment of products, focusing on branded goods.