Block Watne Gruppen ASA. Prospectus in connection with listing of the Company s shares on Oslo Børs

Transcription

1 Block Watne Gruppen ASA Prospectus in connection with listing of the Company s shares on Oslo Børs Share Issue of 5,000,000 New Shares Secondary Sale of up to 15,400,000 Shares Indicative Price Range: NOK 28 - NOK 33 per share Book-building Period in the Institutional Offering: 2 March 2006 to 15 March 2006 at 15:00 hours (Norwegian time) Application Period in the Retail Offering: 2 March 2006 to 15 March 2006 at 12:00 hours (Norwegian time) Lead Manager Co-lead Manager 24 February 2006

2 Important Information This Prospectus has been prepared in connection with an application for listing on Oslo Børs of the Shares of Block Watne Gruppen ASA (the Company ) and the Offering, as defined and described herein. The Prospectus has been prepared to comply with the Norwegian Securities Trading Act and the prospectus requirements set out in the Norwegian Stock Exchange Regulations in force as of 31 December 2005, based on the transitional provisions in regulation no of 9 December The Prospectus has been reviewed by Oslo Børs pursuant to Section 5-2 and 5-3 of the Norwegian Securities Trading Act and the transitional provisions in regulation no of 9 December The information contained herein is as of the date hereof and is subject to change, completion and amendment without notice. There may have been changes in matters affecting the Company subsequent to the date of this Prospectus. Any significant new factor or significant inaccuracy in the Prospectus capable of affecting an assessment of the Offer Shares arising after the publication of this Prospectus and before the Company s shares are listed on Oslo Børs will be published as a supplement to this Prospectus in accordance with applicable regulations in Norway. The delivery of this Prospectus shall under no circumstances create any implication that the information contained herein is complete or correct as of any time subsequent to the date hereof. The Norwegian summary contained in this Prospectus has been included for information purposes only, and the English text of the Prospectus shall prevail in case of inconsistency. No action has been or will be taken in any jurisdiction other than Norway by the Lead Manager, the Co-lead Manager, the Selling Shareholder or the Company that would permit a public offering of the Offer Shares, or the possession or distribution of any documents relating thereto, in any jurisdiction where specific action for that purpose is required. Accordingly, this Prospectus may not be used for the purpose of, and does not constitute, an offer to sell or issue, or a solicitation of an offer to buy or subscribe for, any securities in any jurisdictions in any circumstances in which such offer or solicitation is not lawful or authorised. Persons into whose possession this Prospectus may come are required by the Company, the Selling Shareholder, the Lead Manager and the Co-lead Manager to inform themselves about and to observe such restrictions. In relation to the United States and U.S. persons, this Prospectus is strictly confidential and is being furnished by the Company as part of a private placement exempt from registration under the Securities Act, solely for the purpose of enabling investors to consider the purchase of the Offer Shares offered hereby. None of the Offer Shares has been or will be qualified for sale under the securities laws of any province or territory of Canada. The Offer Shares are not being offered and may not be offered or sold, directly or indirectly, in Canada or to or for the account of any resident of Canada in contravention of the securities laws of any province or territory thereof. In relation to the United Kingdom, this Prospectus and its contents are confidential and its distribution (which term shall include any form of communication) is restricted pursuant to Section 21 (Restrictions on Financial Promotion) of the Financial Services and Markets Act 2000 (as amended). In relation to the United Kingdom, this Prospectus is only directed at, and may only be distributed to, persons who fall within the meaning of Article 19 (Investment Professionals) and 49 (High Net Worth Companies, Unincorporated Associations, etc.) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (as amended) or who are persons to whom the document may otherwise lawfully be distributed. This Prospectus may only be distributed in circumstances which do not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995 (as amended). Further information with regard to restrictions on offering and sale of the Offer Shares and the distribution of this Prospectus is set out in Section 9 Transfer Restrictions. Each prospective purchaser and subscriber to the Offer Shares must comply with all applicable laws and regulations in force in any jurisdiction in which it purchases, subscribes, offers or sells the Offer Shares or possesses or distributes this Prospectus and must obtain any consent, approval or permission required by it for acquiring Offer Shares. Each purchaser of Offer Shares will be deemed to have acknowledged, by its subscription to Offer Shares, that the Company, the Selling Shareholder, the Lead Manager, the Co-lead Manager, and their respective affiliates and other persons will rely on the accuracy of the acknowledgements, representations and agreements set forth herein. Certain statements made in this Prospectus may include forward-looking statements. These statements relate to the Company s expectations, beliefs, intentions or strategies regarding the future. These statements may be identified by the use of words like anticipate, believe, estimate, expect, intend, may, plan, project, will, should, seek, and similar expressions. The forward-looking statements reflect the Company s current views and assumptions with respect to future events and are subject to risks and uncertainties. Actual and future results and trends could differ materially from those set forth in such statements. Except as required by applicable law, the Company does not intend, and does not assume any obligation, to update the forward-looking statements included in this Prospectus as of any date subsequent to the date hereof. 2

3 NOTICE TO NEW HAMPSHIRE RESIDENTS NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENCE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES WITH THE STATE OF NEW HAMPSHIRE ( RSA 421-B ) NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT ANY EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY, OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER, OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH. AVAILABLE INFORMATION For so long as any of the Offer Shares being offered and sold pursuant to the Offering remain outstanding and are restricted securities within the meaning of Rule 144(a)(3) under the Securities Act, if at any time the Company is neither subject to Section 13 or Section 15(d) under the U.S. Securities Exchange Act of 1934, as amended (the Exchange Act ) nor exempt from reporting under the Exchange Act pursuant to Rule 12g3-2(b) thereunder, the Company has agreed to furnish to any shareholder or to a prospective purchaser of shares designated by any such shareholder the information specified in, and meeting the requirements of, Rule 144A(d)(4) under the Securities Act, upon the written request of any such shareholder. PRESENTATION OF FINANCIAL INFORMATION The Company s financial statements were prepared in accordance with Norwegian Generally Accepted Accounting Principles ( Norwegian GAAP ), and its financial statements for 2004 and 2005 were prepared in accordance with International Financial Reporting Standards ( IFRS ). Each of Norwegian GAAP and IFRS differ in certain material respects from each other and from generally accepted accounting principles in the United States ( US GAAP ). Prospective investors should consult their own accounting experts in order to understand how such differences may be relevant to their review of the Company s financial statements. Certain financial and other information set forth in a number of tables in this Prospectus has been rounded, for the convenience of readers. Accordingly, in certain instances, the sum of the numbers in a column may not conform exactly to the total figure given. Any such rounding differences are not material. ENFORCEABILITY OF JUDGMENTS The Company is a public limited company organized under the laws of the Kingdom of Norway. A majority of its directors and executives, and certain of the experts named herein, reside in Norway or other countries other than the United States. All or a substantial portion of the assets of such persons and of the Company are located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon such persons or the Company or to enforce, in U.S. courts, judgments obtained against such persons in jurisdictions outside the United States. In addition, it may be difficult for investors to enforce, in original actions brought in courts in jurisdictions located outside the United States, liabilities predicated upon the civil liability provisions of U.S. securities laws. The Company has been advised by the Norwegian legal counsel, Wiersholm, Mellbye & Bech, advokatfirma AS, that there is doubt as to the enforceability in Norway, in original actions or in actions for the enforcement of judgments of U.S. courts, of civil liabilities predicated upon the U.S. securities laws or other laws of the United States or any state thereof. CURRENCIES The Company publishes its financial statements in NOK. Unless otherwise specified or unless the context otherwise requires, all references in this Prospectus to Norwegian kroner or NOK refer to the currency of Norway. All inquiries relating to this Prospectus or the matters addressed herein should be directed to the Company or the Lead Manager. No persons other than those described in this Prospectus have been authorized to disclose or disseminate information about this Prospectus or about the matters addressed in this Prospectus. If given, such information may not be relied upon as having been authorized by the Company. This Prospectus shall be governed by Norwegian law, and any disputes relating to this Prospectus or the Offering are subject to the sole jurisdiction of Norwegian courts, with Oslo District Court as legal venue. 3

4 Table of Contents Important Information...2 Definitions and glossary...5 Statements Executive Summary The Offering Business Description Financial Information Market description Risk Factors and Legal Matters Share Capital and Shareholder Matters Tax Matters Transfer Restrictions Norwegian Summary...64 Appendix 1: Block Watne Gruppen ASA Articles of Association Appendix 2: Block Watne Gruppen ASA annual report for 2005 Appendix 3: Auditor s report on pro forma adjustments Appendix 4: Application Form Retail Offering Appendix 5: Application Form Employee Offering 4

5 Definitions and glossary Application Form Application Form for the Employee Offering Application Offices Block Watne Block Watne Gruppen Board of Directors or Board Book-building Book-building Period BWG Co-lead Manager Company DnB NOR Markets EBT EBIT EBITDA Employee Offering - The application form to be used by investors when ordering Shares in the Retail Offering, a copy of which is included as Appendix 4 hereto The application form to be used by employees of Block Watne Gruppen when ordering Shares in the Employee Offering, a copy of which is included as Appendix 5 hereto - SEB Enskilda ASA and DnB NOR Bank ASA - Block Watne AS - Block Watne Gruppen ASA with subsidiaries - Board of Directors of the Company - The book-building process arranged by the Lead Manager to assist the Company and the Selling Shareholder in establishing, among other things, the Offering Price, as further described in Sections The period from and including 2 March 2006 to and including 15 March 2006, closing at 15:00 hours (Norwegian time), subject to discretionary extension one time and for no longer than until 15:00 on 20 March 2006, in which Offer Shares may be applied for in the Institutional Offering - The Company s ticker code - DnB NOR Markets - Block Watne Gruppen ASA - DnB NOR Markets, a part of DnB NOR Bank ASA - Earnings Before Tax - Earnings Before Interest and Tax - Earnings Before Interest, Tax, Depreciation and Amortisation - The tranche of the Offering in which Offer Shares are being offered to employees of Block Watne Gruppen, as further described in Section SEB Enskilda ASA - Earnings per share - International Financial Reporting Standards Enskilda EPS IFRS Indicative Price Range - Indicative price range for the Offer Shares as stipulated in Section 2.6 Institutional Offering - The tranche of the Offering in which Offer Shares are being offered by the Company and the Selling Shareholder to institutional investors and other professional investors, subject to a lower limit per application of 33,000 Shares, as further described in Section 2.2 Lead Manager Norwegian GAAP or NGAAP NOK Offering Offering Price Offer Shares Oslo Børs Over-Allotment Facility New Shares - SEB Enskilda ASA - Generally accepted accounting principles in Norway (in Norwegian: God Norsk Regnskapsskikk) - The currency of the Kingdom of Norway (Norwegian krone) - The Institutional Offering, the Retail Offering and the Employee Offering - The price per Offer Share established following the Book-building - the New Shares and the Secondary Shares - Oslo Børs ASA (the Oslo Stock Exchange) The Lead Manager s ability to allocate additional Shares in connection with the Offering as further described in Section The 5,000,000 new Shares to be issued by the Company pursuant to the Offering 5

6 Prospectus Public Limited Companies Act QIB Retail Application Period Retail Offering Secondary Shares Securities Trading Act Selling Shareholder Shares Stabilisation Manager Stock Exchange Regulations USGAAP U.S. Securities Act VPS VPS account - This prospectus prepared in connection with the Offering and the application for listing of the Company s Shares on Oslo Børs, including all appendices - The Norwegian Public Limited Companies Act of 13 June 1997 No Qualified Institutional Buyer as defined in Rule 144A under the U.S. Securities Act - The period from and including 2 March 2006 to and including 15 March 2006, closing at 12:00 hours (Norwegian time), subject to discretionary extension one time and for no longer that until 12:00 on 20 March 2006, in which Offer Shares may be applied for in the Retail Offering - The tranche of the Offering in which Offer Shares are being offered to the public in Norway, subject to a lower limit per application of 200 Shares for each investor, as further described in Section The up to 15,400,000 existing Shares offered by the Selling Shareholder pursuant to the Offering, excluding utilization of the Over-Allotment Facility - The Securities Trading Act of 19 June 1997 No. 79 (as amended) - The shareholder of the Company offering to sell the Secondary Shares pursuant to the Offering, as further described in Section All shares issued by the Company - SEB Enskilda ASA - The Stock Exchange Regulations of 17 January 1994 No. 30 (as amended) - Generally accepted accounting principles in the United States - The U.S. Securities Act of 1933, as amended - The Norwegian Central Securities Depository - An account held with VPS to register ownership of securities Other matters Copies of this Prospectus may be obtained from Block Watne Gruppen and from SEB Enskilda and DnB NOR Markets. Information that this Prospectus is referring to may be viewed in the Company s offices in Oslo. The registered address and head office of Block Watne Gruppen is: Block Watne Gruppen ASA PO Box 1817 Vika NO-0123 OSLO Norway The telephone number is and the fax number is The Company is registered with the Norwegian Register of Business Enterprises as a public limited liability company under registration number

7 Statements The Board of Directors This Prospectus has been prepared to provide information in connection with the Offering and the contemplated listing of the Shares on Oslo Børs. The Board of Directors of Block Watne Gruppen ASA confirms that to the best of their knowledge the information contained in this Prospectus is in accordance with the facts and contains no omissions likely to affect the import of the Prospectus. The Company has appraised market conditions and future prospects on the basis of its best judgment. Harald Walther (Chairman) Oslo, 24 February 2006 Block Watne Gruppen ASA Hege Bømark Lars Nilsen Tore Morten Randen Einar Magnus Hauge Brit Hagelund The Selling Shareholder The Selling Shareholder confirms that it has full ownership to the Secondary Shares being offered as stipulated in Section 2.5 The Secondary Shares, that the Secondary Shares will be offered pursuant to the terms and conditions stated in this Prospectus, and that any Secondary Shares sold will be sold free of any encumbrances. Oslo, 24 February 2006 Lani Invest AS Lead Manager SEB Enskilda ASA has acted as Lead Manager for Block Watne Gruppen and the Selling Shareholder in connection with the Offering and the application for admission to listing on Oslo Børs. The Board of Directors of Block Watne Gruppen and the management of Block Watne Gruppen have prepared this Prospectus in cooperation with the Lead Manager on the basis of information provided by Block Watne Gruppen, annual reports as well as external sources of information. The Lead Manager has endeavored to provide as accurate and complete a presentation of Block Watne Gruppen as possible. However, the Lead Manager makes no guarantees and disclaim any responsibility regarding the accuracy or the completeness of the information contained in the Prospectus or any other information provided in connection with the Offering. Legal and financial due diligence investigations on Block Watne Gruppen have been conducted by independent legal and accounting advisors assisting the Lead Manager. Wiersholm, Mellbye & Bech, advokatfirma AS has acted as the Lead Manager s legal counsel in connection with the Offering, and has on behalf of the Lead Manager and in accordance with an agreed scope performed a review of Norwegian legal matters pertaining to Block Watne Gruppen. PricewaterhouseCoopers AS has been the Lead Manager s advisor on financial and accounting matters relating to the Offering and has performed a financial review of Block Watne Gruppen. As of 24 February 2006, neither the Lead Manager nor any employees of the Lead Manager own any shares in Block Watne Gruppen. Oslo, 24 February 2006 SEB Enskilda ASA 7

8 Legal counsel to the Lead Manager We have acted as Norwegian legal counsel to the Lead Manager in connection with the Offering and the application for admission to listing of the Company s Shares on Oslo Børs described in this Prospectus. We have, on the instruction of the Lead Manager, reviewed the information provided in Section 2 The Offering and Section 8 Tax matters of this Prospectus. On the basis of the information with which we have been presented, we confirm that the description pertaining to Norwegian legal matters given in said sections of this Prospectus, when read together with the risk factors in Section 6 Risk Factors and Legal Matters, in our view is correct in all material respects. We confirm that the resolution to authorize the Board to increase the share capital of the Company by up to NOK 2,000,000 has been duly adopted by the ordinary general meeting of the Company on 23 February Further, we confirm that once the authorisation to increase the share capital has been registered in the Register of Business Enterprises and the Board has duly adopted a resolution to increase the share capital, included the number of New Shares to be issued, the allocation of these, and the Offering Price, the increase of the Company s share capital will have been duly adopted by the competent corporate body and we will issue a confirmation in this respect to Oslo Børs. Our statement is limited to the above and does not extend to the content of other sections of this Prospectus and does not extend to any description of commercial, technical, financial and accounting related matters in the Prospectus. Our statement is strictly limited to matters governed by Norwegian law and jurisdiction. Oslo, 24 February 2006 Wiersholm, Mellbye & Bech, advokatfirma AS 8

9 1. Executive Summary This summary is produced as a supplement to the more detailed information contained in the Prospectus as a whole and the Appendices. Investors who are considering whether to apply for Offer Shares are strongly encouraged to read the entire Prospectus, including Section 6 Risk Factors and Legal Matters, in order to make their own judgment. A Norwegian summary is provided in Section 10 Norwegian Summary. In case of inconsistency between the English and the Norwegian text, the English version shall prevail. 1.1 Summary business description Business overview Block Watne is the largest independent house-building company in Norway and the Block Watne name is the most recognized brand name for residential construction in Norway. The company develops, constructs and sells standardised and affordable quality housing with a focus on standardisation and limited customisation in order to remain cost efficient in the construction process. Block Watne has built in excess of 80,000 homes in Norway since the 1950s. In 2005, Block Watne constructed more than 1,000 houses and apartments. The company has strict focus on housing projects in densely populated areas in the outskirts of cities. Typically, Block Watne projects are located between 10 to 30 minutes driving distance from city centres, with the distances typically being greater the larger the city. The average sales price of a Block Watne house-unit is about NOK 1.8 million (including value added tax). Demand for affordable housing near cities has historically been more stable than the housing market in general, and specifically more stable than the housing markets in city centres. The majority of Block Watne s revenues (84% in 2005) are generated through residential project development. That is, through projects were the company controls the entire value chain, from project idea through property acquisition and development to sale of the finished houses. Block Watne constructs the house, and uses subcontractors for infrastructure and concrete work (including the foundation). The buyers are usually the end customer, a private individual or individuals buying the house or apartment as their home. The size of residential projects vary from four to 10 units up to 250 units (a unit being a house or an apartment). Large projects are built in steps, i.e. whereby sale and subsequently construction of parts are initiated and completed in sequence, significantly reducing the risk related to large development projects. The remaining part of the company s revenues is generated through the sale of construction contracts, whereby Block Watne constructs one of its standard single-unit wooden houses on property owned by the customer, through the sale of pre-regulated properties with an obligation attached to acquire and build a Block Watne house on the property, and through construction of residential buildings for professional clients such as property developers, tenants associations, housing co-operatives and municipalities. 9

10 1.2 Main financial figures The following tables present summary pro forma financial figures derived from the pro forma accounts found in Section 4.1 for the years 2003, 2004 and Summary pro forma profit and loss account The table below shows pro forma profit and loss figures for Block Watne Gruppen for the years 2003, 2004 and NGAAP NGAAP NGAAP IFRS IFRS Amounts in NOK 1,000 Unaudited Unaudited Unaudited Unaudited Unaudited Revenues 1,200,404 1,228,088 1,492,144 1,228,088 1,492,144 EBITDA 127, , , , ,857 EBIT 80,745 93, , , ,604 Result before tax 39,132 57, , , ,348 Net income 18,379 31,509 94,465 74, ,564 EPS (NOK) Revenue growth 2.3 % 21.5 % 21.5 % EBIT margin 6.7 % 7.6 % 12.2 % 11.4 % 14.0 % Summary pro forma balance sheets The table below shows pro forma balance sheets for Block Watne Gruppen for year end 2003, 2004 and NGAAP NGAAP NGAAP IFRS IFRS Amounts in NOK 1,000 Unaudited Unaudited Unaudited Unaudited Unaudited Fixed assets 959, , , , ,353 Current assets 948,437 1,036,317 1,357,589 1,139,330 1,361,536 Total assets 1,908,035 1,941,896 2,219,907 2,006,114 2,223,889 Shareholders equity 415, , , , ,964 Interest bearing debt 984,934 1,041, , , ,726 Other liabilities 507, , , , ,199 Total equity and liabilities 1,908,035 1,941,896 2,219,907 2,006,114 2,223,889 Summary pro forma cash flow statements The table below shows pro forma balance sheets for Block Watne Gruppen for year end 2003, 2004 and NGAAP NGAAP NGAAP IFRS IFRS Amounts in NOK 1,000 Unaudited Unaudited Unaudited Unaudited Unaudited Cash flow from operations 205, , , , ,900 Cash flow from investments -3,419-5,664-2,752-5,664-2,752 Cash flow from financing -197, ,662-78, ,662-78,395 Net cash flow 4,819-1,077 62,753-1,077 62,753 10

11 1.3 The Offering and application for stock exchange listing The Offering comprises 5,000,000 New Shares offered by the Company and up to 15,400,000 Secondary Shares offered by the Selling Shareholder, for a total of up to 20,400,000 Offer Shares, excluding utilization of the Over-Allotment Facility. The Offering will be organised in three separate tranches: the Retail Offering, in which Offer Shares are being offered to the public subject to a lower limit per application of 200 Shares and an upper limit per application of up to but not including 33,000 Shares for each investor; the Employee Offering, in which Offer Shares are being offered to employees of Block Watne Gruppen subject to an application of either 200 Shares or 400 shares per employee; and the Institutional Offering, which is subject to a lower limit per application of 33,000 Shares. The following table summarizes the main terms and conditions of the Offering Size of the Offering: - Up to 20,400,000 Offer Shares with a nominal value of NOK 0,20 each, excluding utilization of the Over-Allotment Facility Number of New Shares offered by the Company: Number of Secondary Shares offered by the Selling Shareholder: - 5,000,000 new Shares each with a nominal value of NOK 0,20 per share - Up to 15,400,000 existing Shares, each with a nominal value of NOK 0,20 per share, excluding utilization of the Over-Allotment Facility Indicative Price Range - NOK 28 - NOK 33 per Offer Share Application Period for the Retail Offering Book-building Period in the Institutional Offering: Expected first day of trading - Number of Shares outstanding before the issuance of New Shares: Number of shares after the Offering: Gross proceeds of the Offering: Gross proceeds of the sale of New Shares: Gross proceeds of the sale of Secondary Shares: - From and including 2 March 2006 to 12:00 hours on 15 March 2006, subject to extension - From and including 2 March 2006 to 15:00 hours on 15 March 2006, subject to extension 17 March 2006, subject to adjustment - 40,000,000 Shares, each with a nominal value of NOK 0,20-45,000,000 Shares, each with a nominal value of NOK 0,20 - Up to approximately NOK 622 million (based on the mid-point of the Indicative Price Range) - Approximately NOK 152 million (based on the mid-point of the Indicative Price Range) - Up to approximately NOK 470 million (based on the mid-point of the Indicative Price Range) 11

12 2. The Offering 2.1 Purpose of listing of the Shares and background for the Offering The application for listing of the Shares on Oslo Børs is an important element of the Company s strategy. Through a stock exchange listing, Block Watne Gruppen will be able to provide a regulated marketplace for the trading of its Shares. Moreover, a listing will increase the attractiveness of the Shares as consideration in possible acquisitions and/or mergers, and also facilitate use of the capital markets to raise further equity capital. In addition, the Company believes that a stock exchange listing will help to further strengthen Block Watne Gruppen s profile in the markets in which it operates. 2.2 The Offering The Offering comprises 5,000,000 New Shares offered by the Company and up to 15,400,000 Secondary Shares offered by the Selling Shareholder, for a total of up to 20,400,000 Offer Shares, excluding the Over-Allotment Facility. In the event of insufficient demand in the Offering, the issue of New Shares will have priority over the sale of Secondary Shares. The gross proceeds from the issue of New Shares will be approximately NOK 152 million while the gross proceeds from the sale of Secondary Shares will be up to approximately NOK 470 million (both based on the mid-range of the Indicative Price Range) and excluding the Over-Allotment Facility. The Offering will be organised in three separate tranches, the Retail Offering, the Employee Offering and the Institutional Offering: the Retail Offering, in which Offer Shares are being offered to the public subject to a lower limit per application of 200 Shares, and an upper limit per application of up to but not including 33,000 Shares for each investor. Applicants will only be allotted Offer Shares in multiples of 200 Shares, and allotments will be rounded down to the nearest multiple of 200 Shares. The Retail Offering will only be marketed in Norway; the Employee Offering in which Offer Shares are being offered to employees of Block Watne Gruppen. Applications can only be made for 200 Shares or 400 Shares per employee; and the Institutional Offering, in which Offer Shares are being offered to institutional investors and other professional investors in Norway and in certain other jurisdictions subject to a lower limit per application of 33,000 Shares. The Offer Shares are being offered and sold in the United States to qualified institutional buyers (as defined by Rule 144A under the Securities Act) only in reliance on Rule 144A under the Securities Act or other applicable exemptions from the Securities Act as part of the Institutional Offering. Allotments will be rounded down to the nearest multiple of 200 Shares. Existing Shareholders preferential right to subscribe for the New Shares as set out in the Public Limited Companies Act has been derogated from in order to satisfy the requirements for listing on Oslo Børs with regard to free float and minimum number of holders of one round lot or more of Shares in the Company. In the event that an investor applies for Offer Shares in both the Retail Offering and the Institutional Offering, the investor s combined application will be regarded as an application in the Institutional Offering. It has been provisionally assumed that approximately 90% of the Offering will be allocated to the Institutional Offering, approximately 9% to the Retail Offering and approximately 1% to the Employee Offering. However, the final allocation between the tranches will be decided by the Board after the end of the Book-building Period on the basis of the application level in the respective tranches relative to the overall application level for the Offering. The mechanism of allocation is further set out in Section 2.9 below. 12

13 2.3 Conditions for completing the Offering On 31 January 2006, the Company applied for listing of the Company s Shares on Oslo Børs. No application has been made for listing of the Shares on any other stock exchange or authorized market place. This Prospectus has been prepared before Oslo Børs has considered the Company s listing application. The application will be considered in a meeting of the Board of Directors of Oslo Børs on 28 February The Company will issue a stock exchange notification informing about the outcome of Oslo Børs consideration of the listing application on or about 1 March Completion of the Offering on the terms set forth in this Prospectus is expressly conditional upon Oslo Børs approving, in the Oslo Børs board meeting 28 February 2006, the Company s application for listing of the Shares on Oslo Børs on terms acceptable to the Company. The Company is confident that the application will be approved. There can, however, be no assurance that Oslo Børs will give such approval. The Company and the Selling Shareholder reserve the right to withdraw the Offering at any time prior to final allocation on 15 March 2006 (subject to extension of the application periods as described in section 2.7 and 2.8) at their sole discretion (and for any reason). Completion of the Offering is further subject to the Board s decision to issue New Shares on 15 March 2006 (subject to extension of application periods as described in Sections 2.7 and 2.8 below). Further, the Offering will not be completed if the Company is unable to satisfy the conditions set by Oslo Børs for final approval of the listing as described above. In the event the conditions for the Lead Manager s payment obligation under the Subscription and Payment Agreement (as described in section 2.13) are not fulfilled (and in such event not waived by the Lead Manager in its sole discretion) before the share capital increase is registered in the Register of Business Enterprises (expected to take place on or about 16 March 2006), the Offering will not be completed. The completion, withdrawal or otherwise non-completion of the Offering will be announced through Oslo Børs company information system under the Company s ticker BWG and in a press release, expected to take place on or around 16 March If the conditions for the Offering have not been met by 1 April 2006, all applicants will be released from their applications commitments (subject to extension of the application periods as described in sections 2.7 and 2.8). Assuming the above conditions are met, the Company expects that the first quotation and trading day will be on 17 March 2006 or, if the necessary registrations cannot be made in time, as soon as possible after 17 March The number of Shares forming one round lot will depend on the Offering Price, but is expected to be 200 Shares. The Company s ticker code will be BWG. It is expected that it will be possible to trade the Offer Shares through Oslo Børs from and including 17 March However, delivery of Offer Shares to investors who have been allotted Offer Shares is conditional upon settlement being received from such investor in accordance with the payment terms set out in Sections 2.7 and The Share Issue The Share Issue will comprise an issue of 5,000,000 New Shares. The determination of the Offering Price, and thereby the determination of the proceeds received by the Company in connection with the Offering will be made by the Board and the Selling Shareholder jointly in consultation with the Lead Manager following the Book-building (as described in section 2.6). Accordingly, the Board s resolution to issue the New Shares cannot be made until the Offering Price is fixed following the Book-building Period. The formal resolution to increase the Company s share capital will be passed by the Board at a board meeting expected to be held on 15 March 2006, provided that the conditions 13

14 set out in section 2.3 of the Prospectus are fulfilled. The formal resolution is included in Section 7.4 Increase of share capital in connection with the Share Issue. The Company s current share capital is NOK 8,000,000 divided into 40,000,000 Shares, each with a par value of NOK After the completion of the Share Issue, the Company s share capital will be increased to NOK 9,000,000 divided into 45,000,000 Shares, each with a par value of NOK The main purpose of the Share Issue is to strengthen the Company s overall financial position. The Company intends to repay parts of a term loan to level that, under the covenants of the loan, will allow the Company to subsequently pay dividends if such dividends are declared. The term loan is described in section The Secondary Shares In addition to the offering of the New Shares by the Company, the Selling Shareholder offers to sell up to 15,400,000 existing Shares (the Secondary Shares ) for a total gross consideration of up to approximately NOK 470 million (based on the mid-range of the Indicative Price Range) at the Offering Price. The Lead Manager has entered into an agreement with Lani Invest AS (the Selling Shareholder ), whereby Lani Invest AS has undertaken to offer up to 15,400,000 Secondary Shares free of encumbrances through the Offering. Following the completion of the Offering, the Selling Shareholder will own 9,600,000 Shares if all the Secondary Shares are sold. In addition, the Selling Shareholder owns Lani Industrier AS which in turn owns Lani Development AS which owns 15,000,000 Shares. The above figures do not include any existing Shares that the Lead Manager has a right to purchase from the Selling Shareholder under the Over-allotment Option. If fully utilised, the Over-allotment Option will increase the number of existing Shares sold by 2,040,000 to up to 17,440,000 Shares. See Section 2.12 Stabilisation and Over-Allotment Facility. Applications for Offer Shares will first be allocated to the Share Issue. Hence, the Secondary Sale will not take place unless the Share Issue is completed. The Company will not receive any proceeds from the Secondary Sale. 2.6 Indicative Price Range and Offering Price An indicative price range of NOK 28 to NOK 33 per Offer Share (the Indicative Price Range ) has been set by the Board and the Selling Shareholder after consultation with the Lead Manager. The Indicative Price Range has been determined on the basis of an overall evaluation, including the Company s historical and expected earnings and future market prospects as well as a comparison of these factors with the market valuation of comparable companies and the expected demand for the Offer Shares. The final Offering Price may be set above or below the Indicative Price Range. The Board and the Selling Shareholder will jointly determine the Offering Price after the end of the Book-building Period. The decision by the Board and the Selling Shareholder will be made after consultation with the Lead Manager, based on, among other factors, an evaluation of the level of demand in the Book-building in the Institutional Offering from different investors. The Offering Price will be the same for the Retail Offering and the Institutional Offering. The Offering Price will be announced through Oslo Børs company information system under the Company s ticker BWG and in a press release once determined by the Board and the Selling Shareholder, expected to take place on or about 16 March

15 2.7 Application procedures in the Institutional Offering Book-building and Book-building Period The Book-building Period will last from and including 2 March to and including 15 March 2006, closing at 15:00 hours (Norwegian time). However, Block Watne Gruppen together with the Lead Manager reserves the right to extend the Book-building Period in their sole discretion. Any such extension of the Book-building Period will be announced before 08:30 hours (Norwegian time) on 14 March Extension will only be made one time, and for no longer than until 15:00 hours (Norwegian time) on 20 March Applications for Offer Shares in the Institutional Offering must be made during the Book-building Period by advising one of the Application Offices of the number of Offer Shares that the investor wishes to apply for and the price that such investor is offering to pay for the Offer Shares. Any oral application will be binding upon the investor and subject to the same terms and conditions as a written application. The Application Office can, at any time and at its sole discretion, require the investor to confirm any oral applications by instrument in writing. Applications made may be withdrawn or amended by the investor at any time up to the end of the Book-building Period. After the end of the Book-building Period all applications that have not been withdrawn or amended are irrevocable and binding upon the investor and each application will represent a binding purchase order to the relevant Application Office to acquire the relevant number of Offer Shares on behalf of the investor. Subject to extension as described above, the book will close at 15:00 hours (Norwegian time) on 15 March 2006, after which no further applications, amendments or withdrawals will be accepted. In the event of extension of the Book-building Period, the allocation date, the first trading date, payment date and the date of delivery of Offer Shares will be extended correspondingly. Furthermore, such extension will also represent an extension of the point in time when applications made in the Institutional Offering become irrevocable and binding upon the investor. Allocation date Notifications of allocations in the Institutional Offering are expected to be issued by the Lead Manager on or about 16 March Payment, delivery and trading of allocated Offer Shares Payment for Offer Shares allocated in the Institutional Offering shall take place against delivery of Offer Shares, through the ordinary Norwegian settlement system (VPO) expected to be on or about 22 March For late payment, interest on the amount due will accrue at a rate equal to the prevailing interest rate under the Norwegian Act on Interest on Overdue Payments of 17 December 1976 No. 100, per the date of the Prospectus being 9.25% per annum. Should payment not be made when due, the Offer Shares allocated will not be delivered to the applicant, and the Lead Manager reserves the right, at the risk and cost of the applicant to sell the allocated Offer Shares on such terms and in such manner as they decide in accordance with applicable regulations. The original applicant remains liable for payment of the Offering Price, together with any interest, costs, charges and expenses accrued, and payment may be enforced for any such amount outstanding. The Offer Shares are expected to be tradable on Oslo Børs from and including 17 March Applicants selling Offer Shares before delivery of such Shares must ensure that payment for such Shares is made within the deadline set out above. Accordingly, an applicant who wishes to sell his Offer Shares before delivery must ensure that payment is made in order for such Shares to be delivered in time to the applicant. 15

16 2.8 Application procedures in the Retail Offering Retail Application Period The Retail Application Period in the Retail Offering will last from and including 2 March 2006 to and including 15 March 2006, closing at 12:00 hours (Norwegian time). However, Block Watne Gruppen together with the Lead Manager reserves the right to extend the Retail Application Period in their sole discretion. Any such extension of the Retail Application Period will be announced before 08:30 hours (Norwegian time) on 14 March Extension will only be made one time, and for no longer than until 12:00 hours (Norwegian time) on 20 March The Application Period will only be extended if the Book-building Period is extended and vice versa. In the event of extension of the Retail Application Period, the allocation date, the first trading date, payment date and the date of delivery of Offer Shares will be extended correspondingly. All applications made in the Retail Offering will be irrevocable and binding upon receipt of a duly completed Application Form by one of the Application Offices or when the application is registered on the Internet, irrespective of any extension of the Retail Application Period. Application Offices and submission of Application Forms All applications in the Retail Offering must be made on the Application Form on paper (a copy of which is attached as Appendix 4 to this Prospectus) or through the Internet (see section 2.10 below). Application Forms together with this Prospectus can be obtained from the Company or from one of the Application Offices. Each applicant in the Retail Offering will be permitted, but not required, to indicate on the Application Form that the applicant does not wish to be allocated Offer Shares should the Offering Price be set above the Indicative Price Range mentioned in Section 2.6. If the applicant elects to do so, the applicant will not be allocated any Offer Shares if the Offering Price is set above the Indicative Price Range. If the applicant does not make this reservation on the Application Form, the application will be binding regardless of whether the Offering Price is set within, above or below the Indicative Price Range. Application Forms that are incomplete or incorrectly completed, or that are received after the expiry of the Retail Application Period, may be disregarded without further notice to the applicant. Properly completed Application Forms must be received by the Application Office by 12:00 hours (Norwegian time) on 15 March No text must be added to the Application Forms other than in the designated fields. To avoid duplicate registrations the applicants are asked to send the Application Form to one Application Office only. Applicants must have a VPS account and an account with a Norwegian bank in order to be allotted Offer Shares. If an applicant does not have a VPS account, it can be arranged through the Application Offices and the majority of banks and investment firms. Allocation Date Notifications of allocation in the Retail Offering are expected to be issued on or about 16 March Applicants wishing to know the precise number of Offer Shares having been allocated to them may contact one of the Application Offices from the morning of 16 March 2006 and onwards. Applicants in the Retail Offering who have access to investor services through an institution that operates the applicant s VPS account should be able to check how many Offer Shares that have been allocated to them from and including 16 March Payment, delivery and trading of allocated Offer Shares In completing the Application Form, each applicant will grant the Lead Manager a single proxy to debit the applicant s Norwegian bank account stated on the Application Form for the total amount due 16

17 for the Offer Shares allocated. Applicants that do not have a Norwegian bank account must contact one of the Application Offices. Debits will be made on or about 20 March 2006, and there must be sufficient funds in the stated bank account from and including 17 March Should applicants have insufficient funds on their accounts or should payment be delayed for any reason, or if it is not possible to debit the accounts, penalty interest at a rate equal to the prevailing interest rate under the Norwegian Act on Interest on Overdue Payments of 17 December 1976 No. 100, (9.25% per annum per the date of this Prospectus) will be payable on the amount due. The Lead Manager reserves the right to make up to three debit attempts within 18 April 2006, if there are insufficient funds on the account on the first debiting date. In the event that funds are not available on the specified bank account at the appropriate date or payment cannot be debited the bank account for some other reason, the Lead Manager reserves the right, at the risk and cost of the applicant to sell the allocated Offer Shares on such terms and in such manner as it decides in accordance with applicable regulations. The original applicant remains liable for payment of the Offering Price, together with any interest, costs, charges and expenses accrued, and payment may be enforced for any such amount outstanding. Delivery of Offer Shares in the Retail Offering to the applicants VPS accounts is expected to take place on or about 21 March 2006, provided that payment of the total proceeds has taken place. Applicants selling Offer Shares before delivery of such Shares must ensure that payment for such Shares is made within the deadline set out above. Accordingly, an applicant who wishes to sell his Offer Shares before delivery must ensure that payment is made in order for such Shares to be delivered in time to the applicant. 2.9 Application procedures in the Employee Offering Block Watne Gruppen wishes to provide the employees with the opportunity to become shareholders in the Company. Accordingly the Board has decided to offer Offer Shares to employees in Block Watne Gruppen. In the Employee Offering, applications can be made for either 200 Shares or 400 Shares per employee. Employees wishing to apply for more than 400 Shares must apply for Shares in the Retail Offering for the number of Shares exceeding 400. Applications for Offer Shares in the Employee Offering must be made on an application form for employees (a copy of which is attached as Appendix 5 to this Prospectus). Applications for Offer Shares in the Employee Offering must be submitted by the employee to Block Watne Gruppen ASA. Applications in the Employee Offering cannot be submitted on the Internet. The Application Period in the Employee Offering will last from 2 March 2006 to 13 March 2006 closing at 12:00 hours (Norwegian time). Properly completed application forms must be received by Block Watne Gruppen ASA by 12:00 hours (Norwegian time) on 13 March No text must be added to the Application Forms other than in the designated fields. The Application Period in the Employee Offering can be extended, but no longer than until 12:00 hours on 17 March The Application Period will only be extended if the Retail Application period is extended as described in section 2.8 above. The employees will be given a discount of 20% on the Offering Price for Shares allocated and purchased in the Employee Offering. For employees who are resident in Norway for tax purposes, a discount will be regarded as a taxable employment income pursuant to Norwegian tax law. However, a discount of up to NOK 1,500 for each employee, will be exempt from Norwegian taxation if the employee is employed by the Company or a subsidiary owned by more than 90% and the Employee Offering has been offered to all the employees pursuant to a general programme. The Company or the Norwegian subsidiary or subsidiaries in which such Norwegian employees are employed will be 17