Registration Document

Transcription

1 Registration Document Listing on Oslo Børs 4 November 2015 Lead Managers: DNB Markets Pareto Securities AS Swedbank Norge As Joint Lead Manager As Joint Lead Manager As Joint Lead Manager

2 REGISTRATION DOCUMENT Important information The Registration Document has been prepared in connection with listing of the bonds at Oslo Børs. References in this Registration Document to Company" and "Issuer" refer to AINMT Scandinavia Holdings AS. References to "Predecessor Group" refer to the group of subsidiaries with AINMT Holdings AB as the parent company, prior to the sale of all subsidiaries to AINMT Scandinavia Holdings AS in March References to "Group" or "AINMT" refer to the group of subsidiaries with AINMT Scandinavia Holdings AS as the parent company, the Group being established upon the acquisition of subsidiaries from AINMT Holdings AB. This Registration Document is subject to the general business terms of the Lead Managers. Confidentiality rules and internal rules restricting the exchange of information between different parts of the Lead Managers may prevent employees of the Lead Managers who are preparing this document from utilizing or being aware of information available to the Lead Managers and/or affiliated companies and which may be relevant to the recipient's decisions. The Lead Managers and/or affiliated companies and/or officers, directors and employees may be a market maker or hold a position in any instrument or related instrument discussed in this Registration Document, and may perform or seek to perform financial advisory or banking services related to such instruments. The Lead Managers corporate finance department may act as manager or co-manager for the Company in private and/or public placement and/or resale not publicly available or commonly known. Copies of this Registration Document are not being mailed or otherwise distributed or sent in or into or made available in the United States. Persons receiving this document (including custodians, nominees and trustees) must not distribute or send such documents or any related documents in or into the United States. Other than in compliance with applicable United States securities laws, no solicitations are being made or will be made, directly or indirectly, in the United States. Securities will not be registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The distribution of the Registration Document may be limited by law also in other jurisdictions, for example in the United Kingdom. Verification and approval of the Registration Document by the Financial Supervisory Authority of Norway ( Finanstilsynet ) implies that the Registration Document may be used in any EEA country. No other measures have been taken to obtain authorisation to distribute the Registration Document in any jurisdiction where such action is required. Unless otherwise stated, the Prospectus is subject to Norwegian law. In the event of any dispute regarding the Prospectus, Norwegian law will apply. The Financial Supervisory Authority of Norway has examined and approved the Registration Document pursuant to Section 7-7 of the Securities Trading Act. The examination and approval by the Financial Supervisory Authority of Norway relate exclusively to the Company having included descriptions pursuant to a pre-defined list of content requirements. Consequently, the Financial Supervisory Authority of Norway has not examined or approved the correctness or completeness of the information disclosed in the Registration Document. Nor has the Financial Supervisory Authority of Norway performed any form of examination or approval of company law aspects described in, or encompassed by, the Registration Document. This Registration Document is not an offer to sell or a request to buy bonds. The content of the Prospectus does not constitute legal, financial or tax advice and bond owners should seek legal, financial and/or tax advice. Page 1 of 44

3 REGISTRATION DOCUMENT TABLE OF CONTENTS: 1 Risk factors Persons responsible Statutory Auditors Forward Looking Statements Information about the Company and the Guarantors Business overview Trend information Profit Forecasts or Estimates Administrative, management and supervisory bodies Administrative, management and supervisory bodies conflicts of interest Board Practices Major shareholders Financial information for Historical financial information for the Issuer and Guarantors The Guarantee... Error! Bookmark not defined. 16 Material Contracts Documents on display Lead Managers' disclaimer Certain Definitions Attachments: Page 2 of 44

4 REGISTRATION DOCUMENT 1 Risk factors 1.1 Risks related to the industry and market conditions Economic condition AINMT s performance is influenced by economic conditions in the markets in which it operates. The following may significantly impact the Group s earnings and financial position: (i) slowdown in the economy and in the telecommunications sector; (ii) a deterioration in business and consumer confidence, employment trends and (iii) drop in consumer spending. Any of these factors may affect the Group s ability to grow its subscriber base and the price charged to its customers Regulatory environment AINMT operates in a highly regulated industry. The Group s businesses are subject to regulations set by Government authorities in each of the markets in which the Group operates. Changes in regulation or Government policy could restrict the Group s ability to manage its operations. Regulatory authorities could amend or revoke licenses, which could materially impact the Group s business performance and operational results. Although the regulatory regime in Scandinavia is viewed as quite stable, the Norwegian incumbent Telenor has a very strong position in terms of market share and has made it difficult for challengers in the market. The wholesale prices for mobile data could therefore become regulated to help Mobile Virtual Network Operators ( MVNOs ) and Service Providers competitiveness in the mobile data market Actual or perceived health risks relating to electromagnetic and radio frequency emissions The electromagnetic signals from mobile devices and base stations have raised concerns over potential health risks. If negative campaigns around the potential effect of radio signals on health were to increase or litigation were to arise, this could lead to negative publicity, potential reduction in customer intake and usage and restrict network roll-out. 1.2 Risks related to the Group s operations Competition from other operators AINMT s operations face competition from other telecommunication operators in the markets in which they operate, as well as fixed line operators in some markets. The Group s main competitors in Norway are Telenor, Netcom and TeliaSonera. In Sweden the main competitors are TeliaSonera, Tele2, Telenor and 3, whereas the main competitors in Denmark are TDC A/S, Telenor Denmark, TeliaSonera and Telmore. Competition from current market participants, potential new entrants and new products and services, may adversely affect the Group s performance. Increased competition could lead to an increased customer churn rate (churn rate being the proportion of contractual customers or subscribers who leave a supplier during a given time period) and a decrease in customer growth rates as well as affect in the prices the Group charges for its products and services negatively Future investments in maintaining, upgrading and expanding its networks AINMT s success is dependent on its ability to continue its investments in maintaining, upgrading and expanding its telecommunication networks. The Group has through its subsidiaries made substantial investments in its networks and is currently upgrading its telecommunication services from third generation broadband services ( 3G ) to Long-Term Evolution technology ( LTE ) which is the fourth-generation standard ( 4G ) for wireless communication of high-speed data for mobile phones and data terminals. See also section However, there are some factors that are outside the control of the Group that could restrict or limit the Group s ability to continue with those investments. These include the availability of new and attractive products in the market, the ability of equipment suppliers to deliver their products in an effective and satisfactory matter, and the Group s ability to negotiate with its suppliers. In the 450 MHz broadband segment, efficient and affordable LTE450 routers are important to be able to deliver competitive services. Failure to Page 3 of 44

5 REGISTRATION DOCUMENT maintain and develop robust telecommunication networks could hinder the Group s financial and operational performance in the future. By becoming a pure 4G operator, the development of the LTE technology and innovations such as Voice over LTE ( VoLTE, the recent introduction of transmitting voice services over a 4G LTE data network) are key and the costs and timing of these innovations are uncertain License renewal risk Currently the Group holds a number of telecommunication licenses in Norway, Sweden and Denmark, licenses which are crucial for the Group in order to operate its telecommunications networks and deliver its products and services to its customers. These licenses are issued by the authorities in the markets in which it operates. When these licenses expire, the Group will need to renew them in order to continue its operations. The Group s ability to renew its licenses in the future may be affected by factors outside of its control such as competition from other operators when bidding for license renewals or the authorities decision to revoke licenses or limit the number of license-holders. Failure to secure licenses in the future would have a significant impact on the Group s ability to continue to deliver its products and services and subsequently impact the Group s financial and operational performance. The 450 MHz frequencies licenses expire in 2019 for Norway, 2020 for Sweden and in 2022 for Denmark and it is unclear what the auction format will be and if AINMT will be successful in renewing these licenses. The 800, 900 and 1,800 MHz frequencies purchased in Norway will expire in Delay in network roll out, swap and network stability The Group s ability to operate successfully is dependent on the Group s ability to deploy sufficient resources, complete an efficient transition to LTE and operate the Group s networks. The failure or breakdown of key components of the Group s networks, including hardware and software, may have a material negative effect on the Group s financial and operational performance. Although all system parts are redundant, if two or more business-critical nodes fail, the network might have unstable and weak services to the end-user which could lead to customers terminating their services with AINMT Relationship with suppliers AINMT depends on a limited number of suppliers and vendors to provide equipment and services to develop and upgrade its networks and operate its businesses. The Group s suppliers of core network, radio and access equipment may not continue to supply equipment and provide services to the Group on terms that are favorable or may discontinue manufacturing the necessary equipment required to operate the telecommunications networks. The Group may experience problems such as the availability of new devices, higher than anticipated prices of new devices, and potential difficulties with new suppliers. Given that the number of 450 MHz band operators and subscribers globally is limited, the attractiveness for suppliers to supply equipment for this frequency band is limited which could lead to fewer suppliers and higher prices for equipment and devices. Any failure in relation to the supply chain may have a material adverse effect on the Group s financial and operational performance AINMT s ability to retain its personnel and attract new talent AINMT s success is largely dependent on its ability to retain its best performing employees and recruit new top talent. Competition is intense for qualified telecommunications and information technology personnel. To a large extent, the Group s ability to recruit and retain skilled personnel for growth business areas and new technologies will depend on its ability to offer them competitive remuneration packages. The Norwegian operation will need to attract additional employees due to the introduction of smartphone services on the new frequencies. The ability to attract new employees might be hampered as the telecom sector is relatively concentrated which could limit the mobility and availability of human resources. If the Group fails to retain or recruit competent employees, its ability to develop its business going forward will be limited The licenses may have limited value upon a bankruptcy If any of the license owning companies in the Group enters into bankruptcy, the licenses will be part of the bankruptcy estate. If the bankruptcy leads to a breach of the license requirements or the license fee not being paid, there is a risk that the licenses may be revoked by the authorities. In normal circumstances the bankruptcy estate will be allowed to find a buyer for the license(s) and assign them to the buyer, but in order to Page 4 of 44

6 REGISTRATION DOCUMENT assign licenses in Norway and Sweden the authorities must consent to the assignments. In Denmark there is only a notification requirement to the authorities both prior to the assignment and then again after the assignment has taken place. For the licenses in Norway and Sweden there is a risk that the authorities do not consent to the assignment and for all licenses there is a risk that there is no existing market for the license(s) when the bankruptcy estate offers the license(s) for sale. If licenses for one of more reasons prove impossible to assign, there is a risk that the license(s) will be revoked by the authorities without any compensation to the license holder New licenses auctioned by the authorities The authorities in Norway, Sweden and Denmark may hold auctions for new licenses in the future which may lead to new licenses being assigned to current or new competitors of the Group. Such assignment may lead to increased competition in the telecommunications market and may have a negative effect on the prices the Group is able to obtain from its customers. Assignment of new licenses may also decrease the demand for the Group's services. Increased competition through assignment of new licenses may therefore have a material adverse effect on the Group s financial and operational performance Reporting differences The historical financial in this Registration Document has been prepared and reported partially in accordance with Swedish GAAP and partially in accordance with IFRS. The use of different reporting standards can result in key financial ratios which are not fully comparable. 1.3 The Group s financial risks Foreign exchange risk Exchange rate fluctuations affect AINMT s financial results through translation of the profit and loss accounts and balance sheets of foreign subsidiaries to Norwegian kroner (translation exposure). AINMT s reporting currency is Norwegian krone (NOK), while some subsidiaries use Swedish and Danish currency (SEK or DKK). Additional currency risks arise when subsidiaries enter into transactions that are denominated in currencies other than their functional currency, including agreements with equipment suppliers. The currency transaction risk is associated with changes in the value of USD relative to NOK, SEK and DKK. AINMT does not hedge its foreign exchange rate exposure Refinancing and liquidity risks Refinancing risk refers to the risk that the Group will be unable to obtain financing, or that it can be obtained only at a significantly higher cost. AINMT will have a relatively high level of debt after the Bond Issue. As a result of this high leverage, AINMT uses a large share of its cash flow for payment of liabilities, which means that AINMT s financial flexibility is limited Credit risks Credit risk refers to the risk that a counterparty to AINMT will be unable to meet its obligations and thereby causes a loss to the Group, mainly attributable to trade accounts receivables. Due to the end customer structure encompassing a large number of customers each with a relatively very small credit, AINMT deem this risk as fairly low Impairment risks The Group has assets and liabilities that have been valued with the help of JZ Capital Partners AB as third party experts. These includes network, license and deferred tax assets and deferred tax liabilities. Impairment tests are part of the annual audits. Page 5 of 44

7 REGISTRATION DOCUMENT 1.4 Regulatory risks Failure to comply with coverage requirement for 800 MHz frequency band The license in the 800 MHz frequency band awarded to Ice Communication Norge AS (former Telco Data AS) in December 2013 requires Ice Communication Norge AS to ensure that 40% of the population in Norway has access to mobile broadband with a minimum download speed of 2 Mbps within four years of being awarded the license. Should Ice Communication Norge AS fail to comply with this requirement it could result in the authorities revoking the license without any compensation to Ice Communication Norge AS. Such revocation is likely to have a material adverse effect on the Group s operation and financial performance Assignment of the licenses requires governmental approval In situations where the Group might consider improving its financial condition through sale of assets, the Group might divest licenses to raise additional funds and assign the licenses to the buyer. In order to assign licenses in Norway and Sweden the authorities must consent to the assignments, while in Denmark only a notification requirement to the authorities is required (both prior to the assignment and then again after the assignment has taken place). For the licenses in Norway and Sweden there is therefore the risk that the authorities do not consent to the assignment. This implies that the Group may have limited ability to improve its financial condition through sale of assets. 1.5 The Group s risk factors The risks mentioned above reflect the Issuer s and the Guarantors risk factors on a consolidated and unconsolidated basis. Page 6 of 44

8 REGISTRATION DOCUMENT 2 Persons responsible 2.1 Persons responsible for the information Persons responsible for the information given in the Registration Document are as follows: AINMT Scandinavia Holdings AS Østensjøveien Oslo Norway 2.2 Declaration by persons responsible This Registration Document has been prepared on behalf of AINMT Scandinavia Holdings AS. The Company confirms that, having taken all reasonable care to ensure that such is the case, the information contained in this Registration Document is, to the best of its knowledge, in accordance with the facts and contains no omission likely to affect its import. Oslo, 4 November 2015 AINMT Scandinavia Holdings AS Page 7 of 44

9 REGISTRATION DOCUMENT 3 Statutory Auditors 3.1 Names and addresses The Issuer s auditor: PricewaterhouseCoopers AS Postboks 478 Sentrum NO-0106 Oslo Norway PwC is a member of The Norwegian Institute of Public Accountants (Nw. Den Norske Revisorforening). The auditor of AINMT Holdings AB is: Öhrlings PricewaterhouseCoopers AB Torsgatan 21 SE Stockholm Sweden Öhrlings PricewaterhouseCoopers AB is a member of FAR, the Swedish professional institute for authorized public accountants, approved public accountants and other highly qualified professionals in the accountancy sector in Sweden. Auditors of the Guarantors: PricewaterhouseCoopers AS is also the auditors of Ice Norge AS and Ice Communication Norge AS. Öhrlings PricewaterhouseCoopers AB is also the auditor of Netett Sverige AB: Auditors of Ice Danmark ApS: PricewaterhouseCoopers Statsautoriseret Revisionsaktieselskab, Strandvejen 44 DK-2900 Hellerup, Denmark PricewaterhouseCoopers Statsautoriseret Revisionsaktieselskab is a member of the Institute of State Authorized Public Accountants in Denmark. Auditors of Officer AS: DELOITTE AS Postboks 221 Sentrum NO-0103 Oslo Norway Deloitte is a member of The Norwegian Institute of Public Accountants (Nw. Den Norske Revisorforening). Auditors of Drammen Tele AS: K-TEAM AS Postboks 17 Page 8 of 44

10 REGISTRATION DOCUMENT 1333 KOLSÅS Norway K-TEAM AS is a member of The Norwegian Institute of Public Accountants (Nw. Den Norske Revisorforening). There has been no change in auditors of the Issuer or the Guarantors for the period covered by the historical financial information. 3.2 Financial reports The Issuer, AINMT Scandinavia Holdings AS, is a new off-the-shelf company that was founded in January It was acquired by AINMT Holdings AB in March 2014 for the sole purpose of the Bond Issue, and as such it does not have any historical financials prior to Its first transaction was, on 17 March 2014, to acquire the subsidiaries Ice Norge AS, Ice Communication Norge AS, Netett Sverige AB and Ice Danmark ApS from its parent company AINMT Holdings AB, as part of the Bond Issue. In all material aspects, AINMT Scandinavia Holdings AS s historical information prior to its establishment is constituted by the three companies Ice Norge AS, Netett Sverige AB and Ice Danmark ApS. The audited financial statements for the financial year 2013 for these companies, all prepared in accordance with local GAAPs, are enclosed to this report. As from the date of the bond issuance these three companies are a part of the AINMT Scandinavia Holdings AS s group (please also see section 14). In accordance with the Bond Agreement, the Issuer prepares and reports its consolidated financial reports in accordance with IFRS. The reporting is done on quarterly basis. According to the agreement also standalone financial statements, prepared under local GAAPs, are reported for all companies within the group, current and future, on quarterly basis. Upon listing of the Bonds on Oslo Børs the Group will distribute financial reports and other relevant information through Oslo Børs distribution system. Prior to listing the bond, to date six (unaudited) interim reports have been published; all quarters of 2014 and the first two quarters of 2015 as well as the consolidated audited Annual Report for The standalone condensed financial reports for all the guarantors are included as additional information in the interim reports. Page 9 of 44

11 REGISTRATION DOCUMENT 4 Forward Looking Statements The Registration Document includes forward looking statements that involve risks and uncertainties. Such forward-looking statements relate to future events and AINMT Scandinavia Holdings AS operations, objectives, expectations, performance, financial condition and intentions. Section sets out specific targets the Issuer has for market share and population coverage in the Norwegian Market. When used in this Registration Document, the words expect, intend, plan, believe, anticipate, estimate and variations of such words and similar expressions are intended to identify forward-looking statements. Forward looking statements are necessarily estimates reflecting the judgment of senior management, involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the Company s control. Actual results may differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially include, but are not limited to, those factors discussed in Section 1 Risk Factors. Although it is believed that the expectations are based upon reasonable assumptions, the Company can give no assurance that those expectations will be achieved or that the actual results will be as set out in the presentation. Page 10 of 44

12 REGISTRATION DOCUMENT 5 Information about the Company and the Guarantors 5.1 Legal and commercial name The legal and commercial name of the Issuer is AINMT Scandinavia Holdings AS. 5.2 Place of registration and registration number AINMT Scandinavia Holdings AS is a Norwegian company. It is registered in the Brønnøysund Register Center with the organization number Date of incorporation The Issuer was incorporated in January Domicile, legal form, phone number and address The Issuer is a Norwegian private limited liability company, incorporated and regulated by the Norwegian Companies Act. The address is Østensjøveien 32, 0667 Oslo, Norway. Phone number is Recent events relevant to evaluation of solvency None for the Issuer or the Guarantors. 5.6 Memorandum and Articles of Association Article 3 in the articles of association of the Issuer sets out the purpose of the Issuer: The object of the company's business shall be telecommunication and related activities; along with any commercial, industrial or financial transaction with respect to real estate or tangible property that can be linked - directly or indirectly - to the above purpose or could accomplish this purpose, including participation in other companies. The Guarantors Ice Norge AS, Ice Communication Norge AS, Netett Sverige AB, Ice Danmark ApS, Officer AS and Drammen Tele AS have similarly worded purposes in article 3 in their articles of association. 5.7 The Guarantors Ice Communication Norge AS, previously Telco Data AS (legal name) Organization number: Business register: Brønnøysund Register Center Domicile: Oslo, Norway Legal form: Limited liability Commercial name: Ice.net Date of incorporation: 21 January 2014 Ownership: 100% owned by the Issuer Address: Østensjøveien 32, 0067 Oslo, Norway Telephone number: Page 11 of 44

13 REGISTRATION DOCUMENT Ice Communication Norge AS is a Norwegian private limited liability company, incorporated and regulated by the Norwegian Companies Act. Ice Norge AS (legal name) Organization number: Business register: Brønnøysund Register Center Domicile: Oslo, Norway Legal form: Limited liability Commercial name: Ice.net Date of incorporation: 6 September 2007 Ownership: 100% owned by the Issuer Address: Østensjøveien 32, 0067 Oslo, Norway Telephone number: Ice Norge AS is a Norwegian private limited liability company, incorporated and regulated by the Norwegian Companies Act. Netett Sverige AB (legal name) Organization number: Business register: Swedish Companies Registration Office Domicile: Stockholm, Sweden Legal form: Limited liability Commercial name: Net1 Date of incorporation: 18 December 2008 Ownership: 100% owned by the Issuer Address: Regeringsgatan 25, Stockholm, Sweden Telephone number: +46 (0) Netett Sverige AB is a Swedish private limited liability company, incorporated and regulated by the Swedish Companies Act. Ice Danmark ApS (legal name) Organization number: Business register: Danish Central Business Register Domicile: Copenhagen, Denmark Legal form: Limited liability Commercial name: Net1 Date of incorporation: 8 September 2006 Ownership: 90,32% owned by the Issuer Address: Torveporten 2, 3. Sal, 2300 Valby, Denmark Telephone number: The company is a Danish private limited liability company, incorporated and regulated by the Danish Companies Act. Page 12 of 44 Officer AS (legal name) Organization number: Business register: Brønnøysund Register Center

14 REGISTRATION DOCUMENT Domicile: Oslo, Norway Legal form: Limited liability Commercial name: Ice.net Date of incorporation: 17 July 2008 Ownership: As from 1of March 2015, 100% owned by the Ice Communication Norge AS Address: Drammensveien 211, 0281 Oslo, Norway Telephone number: Officer AS is a Norwegian private limited liability company, incorporated and regulated by the Norwegian Companies Act. The operations of this company are immaterial in comparison with the others. Drammen Tele AS (legal name) Organization number: Business register: Brønnøysund Register Center Domicile: Oslo, Norway Legal form: Limited liability Commercial name: None Date of incorporation: 22 February 2009 Ownership: 100% owned by the Officer AS Address: Drammensveien 211, 0281 Oslo, Norway Telephone number: - Drammen Tele AS is a Norwegian private limited liability company, incorporated and regulated by the Norwegian Companies Act. This company is dormant. 6 Business overview 6.1 Principal activities Markets, History and Overview The markets the Issuer operates within AINMT considers the Scandinavian countries Norway, Sweden and Denmark as its main markets, and is targeting both residential and business customers. Currently the Group holds a number of telecommunication licenses in these three countries. The Group offers voice and mobile broadband services in Norway and mobile broadband services in Sweden and Denmark to both residential and business customers, M2M solutions to business customers and IP-telephony in Sweden. These markets are highly regulated by the respective national authorities, but the regulatory regimes are considered to be quite stable. The Scandinavian mobile market in general continues its transition from being voice-centric to data-centric, with voice and messaging being only complimentary for a majority of customers. Competition for customers among the telecommunication providers now revolves around 4G network coverage and higher data speed. The Group s main competitors in Norway are Telenor, Netcom and TeliaSonera. In Sweden the main competitors are TeliaSonera, Tele2, Telenor and 3, whereas the main competitors in Denmark are TDC A/S, Telenor Denmark, TeliaSonera and Telmore. Page 13 of 44

15 REGISTRATION DOCUMENT The history of Nordisk Mobiltelefon AS The predecessor to AINMT Holdings AB, Nordisk Mobiltelefon AS ( NMT ), was established in 2003 with the objective to deploy and provide premium grade mobile data- and telecommunications networks for primarily rural areas, utilizing the CDMA2000 technology (second generation telecommunication technology 2G on the low frequency band 450 MHz. The Norwegian, Swedish and Danish 450 MHz licenses were respectively acquired in June 2004, March 2005 and September In , NMT launched its commercial operation under the brand ice.net. NMT s strategy did not succeed in securing a significant market share and subsequently filed for bankruptcy in February Acquisition of NMT by Access Industries Inc Access Industries Inc an investment company previously not associated with NMT - acquired the Norwegian and Swedish operations from bankruptcy in March 2009 and the Danish operation in September 2009 through a new Swedish company AINMT Holdings AB. Access Industries Inc ( Access Industries ) is a privately held American holding company founded in 1986, which specializes on natural resources, chemicals, media and telecommunications. It currently owns 76.93% of AINMT Holdings AB. The Norwegian, Swedish and Danish operations acquired in 2009 were mainly the companies that today are named Ice Norge AS, Netett Sverige AB and Ice Danmark ApS. As part of the acquisition, a secured creditor s asset sale agreement ( SCASA ) was entered into with ABN Amro Bank N.V. regarding the Norwegian operations (please refer to section 17). Following the acquisition, a credit facility of SEK 52 million was agreed with Teracom in Sweden in May The facility was fully repaid in December Network upgrades In 2010, the Predecessor Group (the group of subsidiaries with AINMT Holdings AB as the parent company, prior to the sale of all subsidiaries to AINMT Scandinavia Holdings AS in March 2014) signed a network installation agreement with Telefonaktiebolaget LM Ericsson ( Ericsson ) to replace the ZTE network in Norway and the Huawei networks in Sweden and Denmark with one, brand new network in all countries. A vendor financing facility of USD 50 million was also set up as part of the replacement agreement. The network replacement was completed in December In February 2011, the Predecessor Group upgraded its networks in Norway, Sweden and Denmark to RevB technology, the latest generation CDMA standard, increasing the download speed to 9.3 Mbit/s from 3.1 Mbit/s on the current RevA technology. In the summer of 2015, the Issuer Group commenced the second major network upgrade with a technology shift from CDMA to LTE, enabling download speeds of up to 39 Mbit/s. As of the date of this Registration Document, the entire network in Denmark is upgraded, while the upgrade of the networks in Norway and Sweden is planned to be finalized in October The new networks are supplied by Alcatel-Lucent. The upgrade to LTE is, as planned, financed by the proceeds from the Bond Issue Milestones Following the acquisition by Access Industries, the Predecessor Group focused on offering mobile data services through routers instead of voice and data services through mobile handsets, which previously had been the strategy pursued by NMT. Mobile data was viewed as the segment in the telecom market with largest growth potential. Since the acquisition of the business of NMT by Access Industries in 2009, the Predecessor Group has grown its subscription base to 196,000 subscribers by the end of The consolidated operating revenue increased from SEK 145 million in 2009 to SEK 560 million in The Norwegian operation turned EBITDA positive in Q and the Predecessor Group's EBITDA turned positive in Q Successful trials with LTE technology were conducted in Q on the 450 MHz, 800 MHz and 1,800 MHz frequency bands. In December 2013, additional spectrums in the 800 MHz, 900 MHz and 1,800 MHz bands were acquired in Norway via Ice Communication Norge AS (formerly named Telco Data AS), an affiliate Page 14 of 44

16 REGISTRATION DOCUMENT company at the time owned 100% by AI Media Holdings (NMT) LLP. Ice Communication Norge AS was transferred to AINMT Holdings AB on 17 March 2014 as a contribution in kind ( apportemission ) who immediately transferred it to the Issuer as a share capital increase ( tingsinskudd ). As of the date of this Registration Document, Ice Communication Norge AS is 100% owned by the Issuer. In July 2014 TeliaSonera (one of AINMT s major competitors) announced it had agreed to buy Tele2 Norway (another of AINMT s competitors) for 5.1 billion Swedish SEK, following Tele2's loss in December of key Norwegian mobile licenses. In order for TeliaSonera to win approval from the Norwegian Competition Authority for the take-over of Tele2, TeliaSonera announced on October 1, 2014 an agreement to divest most of Tele2 s mobile network infrastructure in Norway (Network Norway) to Ice Communication Norge AS, conditional on the approval from the Norwegian Competition Authority for the Tele2 acquisition. Consequently, following the approval from the competition authorities on 5 February 2015, AINMT acquired Network Norway, signed a national roaming agreement with TeliaSonera and obtained an option to overtake additional spectrum in the 2100MHz band. As a result, AINMT is from 1 March 2015 a smartphone player in Norway, launching its own consumer brand in April On November 11 th 2014, AINMT signed a deal with Alcatel-Lucent to deploy 4G LTE and IP networking solutions to be rolled out in In June 2015, the Norwegian arm of AINMT conducted two early pilot tests, installing the new 4G LTE network in Årdal and Trysil, and in July the pilot 4G LTE network was installed on Gotland, Sweden. In August 2015 the Denmark arm concluded the swap of its entire network to 4G LTE August and is now a fully-fledged 4G internet access operator. The swaps in Sweden and Norway to 4G LTE are ongoing and expected to be finalized according to plan in October The Group s operations Overview of the Group s operations AINMT operates in in Norway, Sweden and Denmark through its trademarks ice.net (Norway) and Net1 (Sweden and Denmark). Both ice.net and Net1 offers mobile broadband services and products to residential and business customers over the 450MHz frequency band, and following the acquisition of Network Norway (see above) AINMT offers mobile telephony and smartphone services to the Norwegian market as a fullyfledged telecom operator. Related services offered include machine-to-machine ( M2M ) solutions in all countries and IP-based telephony in Sweden. The products and services offered are aimed to be flexible and simple to use. Products are marketed online, through telemarketing, field-marketing, direct sales and resellers. AINMT Holdings AB is the parent company of the Issuer and provides central management functions to the operating companies, including legal support, financing and cash management, financial reporting, and procurement coordination. Central costs are distributed to operating companies in accordance with the current transfer pricing agreement and accompanying intra-group service agreement. Distributions are based on weighted proportion of number of subscriptions, revenues and gross tangible non-current assets. On 10 December 2013, Ice Communication Norge AS, a company 100% owned and controlled by AI Media Holdings (NMT) LLC, an Access Industries company, and at that time named Telco Data AS, was announced as one of three successful bidders in the Norwegian frequency auction. Ice Communication Norge AS was awarded three licenses spread over the 800, 900 and 1,800 MHz bands. The acquired licenses position the Group to explore new business opportunities within a significant larger share of the Norwegian mobile telecommunications market. On 5 February 2015, the competition bureau in Norway sanctioned the TeliaSonera acquisition of Tele2 in Norway. As per the same date, and as a part of the sanction, it was announced that Ice Communication Norge AS signed a national roaming agreement with TeliaSonera in Norway and to also acquire certain network assets from Network Norway including its customer base of business customers. As from this date, the Group offers telephony and smartphone services and products in Norway, utilizing the spectrums acquired in December The Group comprises the following operating companies: Ice Norge AS, Østensjøveien 32, 0667 Oslo, Norway (reg.nr ) Page 15 of 44

17 REGISTRATION DOCUMENT Ice Communication Norge AS, Østensjøveien 32, 0667 Oslo, Norway (reg.nr ) Netett Sverige AB, P.O. Box 7460, Stockholm, Sweden. (reg.nr ) Ice Danmark ApS, Torveporten 2, 2500 Valby, Denmark. (reg.nr ) The table below sets forth key operational figures for the Group s Norwegian, Swedish and Danish operations, as per the date of the latest interim report (30 June 2015) Operating company: Ice Norge AS Ice Communication Norge AS Norway Norway Sweden Denmark Netett Sverige AB Ice Danmark ApS No. of full-time employees 1 : 32 n/a No. of subscribers ( 000): Network area coverage: 75% n/a 95% 98% No. of radio base stations (RBS): 551 n/a Licensed spectrum bands (MHz): 410, , 900, 1, It should be noted that as the group is currently in the middle of the process of upgrading its old CDMA network, the RBS statistics in the table above is subject to daily changes. Also, along with the acquisition of Network Norway in 2015 came two small entities, Officer AS (reg.nr ) and Drammen Tele AS (reg.nr ), the latter being dormant company. Officer AS has 3 employees but neither of the companies has any subscribers, owns any network assets or spectrums licenses The network Mobile broadband services has up until Q been offered through the Group s own 3G CDMA2000 network, which is currently being upgraded to LTE technology, providing both increased speed and increased capacity. The low spectrum frequency used by AINMT offers advantages due to its supreme carrying capacity. Low frequencies also allows for better signal penetration, meaning they pass through objects with less attenuation, and the latitudinal range of Scandinavia combined with the varied topography and widespread population makes it ideal for the lower 450MHz frequency bands. AINMT s Scandinavian network covers geographically up to 95% of Sweden, up to 98% of Denmark and up to 75% of Norway, according to AINMTs own estimates. The network also has an offshore reach of up to 120 kilometers. Competing mobile broadband operators offer their services through higher frequency networks ranging from 800 MHz to 2,600 MHz. Higher frequency networks require more base stations in order to achieve the same geographical coverage as low frequency networks like the 450 MHz frequency. The 3G CDMA network allowed for download speeds of up to 9.3 Mbit/s and upload speeds of up to 5.4 Mbit/s, while the new 4G LTE network will allow download speeds up to 35 Mbit/s and upload speeds to 7 Mbit/s. The 450 MHz frequency provides three to four times more coverage area per transmitter than GSM and UMTS in the 900 MHz band, and ten to twenty times more coverage area per transmitter than in the 1,800 MHz to 2,600 MHz frequency bands. Due to longer wave transmission, the network is more adequate for landscapes with undulated terrain and provides better indoor coverage. These advantages enable the Group to offer coverage where it may not be economically viable for competitors. The Group is, as a consequence of acquiring various telecom licenses, licensed to operate in the 450 MHz frequencies until 2019 in Norway, 2020 in Sweden and 2022 in Denmark. As from 2015, the Norwegian business has developed from a pure mobile broadband service provider into a fully-fledged telecom operator. Combining the higher spectrums acquired with the 450MHz band using the same standardized LTE technology, ice.net has an unbeatable offer to its customer. These new frequencies are licensed until Excluding group management and staff Page 16 of 44

18 REGISTRATION DOCUMENT Product and service offerings The Group offers voice and mobile broadband services in Norway and mobile broadband services in Sweden and Denmark to both residential and business customers, M2M solutions to business customers and IPtelephony in Sweden. Products and services are proprietarily branded. The residential customer segment refers to private individuals, while business customers refer to all other customers, e.g. companies, organizations and institutions. The residential segment accounted for 65% of Group revenues in As the 450MHz mobile broadband network is currently being upgraded in all countries, all current Customer Premises Equipment, the routers, has to be exchanged to work with the new LTE technology. In order to minimize churn due to annoyance in this upgrade process, special discounts are offered to current customers. These discounts are not representative for the ongoing business Residential customers With regards to the new voice/smartphone products and services offered in Norway, only three options are made available to new customers; NOK 99/month for 1 GB, NOK 229/month for 2 GM/month or NOK 299 for 5 GB/month. Voice and messaging is included, no startup-fee. The subscriptions are without binding and the download speed is capped to 50 Mbit/s. With regards to the mobile broadband services the price plans offered to residential mobile broadband customers range from 1 GB to 50 GB per month, allowing customers to choose a price plan that matches their data consumption. If customers reach their monthly data allowance, they have the option to purchase additional data. Modems/routers can either be purchased outright or rented by paying a monthly fee. Residential mobile broadband customers in Norway are subject to a 12-month binding period, residential customers in Sweden can choose between no binding or a 12-month binding period whilst Danish residential customers only also offers both non-binding and binding contracts but have a legal limit of 6 months to adhere to. In Sweden, the Group offers IP-telephony as a bundled package with its mobile broadband services or as a standalone service Business customers With regards to the new voice/smartphone products and services offered to business customers in Norway, the offerings are both with and without binding (24 months). The offers are classified as fri with unlimited messaging and voice within ice.net s network and base with a lower monthly fee but no messaging included. Vioce is still free within ice.net s network. Both offers can be with or without 24 months binding, the latter naturally with a lower monthly fee. Basically only four offerings are provided, to which the customer can add data packages or pay for extra per MB when exceeding the limit. With regards to mobile broadband products, the two main offerings for business customers are mobile broadband services and M2M solutions. Business mobile broadband subscribers are charged a start-up fee, a monthly subscription fee based on their price plan and have the option to either pay a monthly rental fee for the modem/router or purchase the modem/router upfront. Business customers in Norway are subject to an 18-month binding period whilst in Sweden and Denmark the customer can choose both binding and non-binding contracts, in Sweden the option with binding period is 12 months and in Denmark it is 18 months.. M2M is a broad label used to describe any technology that enables networked devices to exchange information and perform actions without manual assistance. M2M offerings include, inter alia: M2M control (tool for monitoring a network, troubleshooting, check network quality etc.); Public static IP (Pubic IP means the IP address can be visited from any computer in the world, static IP means the IP address never changes as long as the user stays with the same provider or same server) Priority (gives priority allocation of available capacity in the cell, meaning that business-critical solutions can continue to function, regardless of network load); Page 17 of 44

19 REGISTRATION DOCUMENT Virtual Private Networks ( VPN, creates a secure connection between the mobile broadband modem and the customer s internal network); and HotSpot (public access to WiFi in e.g. restaurants, buses, airports etc.). The Group offers both generic and customised M2M solutions. Price plans for these subscriptions vary with the type of subscription and the customer s choice of fixed or variable data amounts. Generally, price plans follow the same scheme as for the Group s other mobile broadband services with monthly fees and a contractual binding period Devices and accessories For the mobile broadband services, the Group offers a range of modems and routers adapted to specific needs. The modems and routers for mobile broadband internet access are portable and allow for multiple users through WiFi. In addition, the Group offers antennas that enhance coverage and speed by amplifying the power of the signal. The standard modems and routers offered have a built-in battery as backup or to facilitate use in areas with bad or limited access to electricity. For M2M solutions, there are numerous additional devices offered that are customised to meet specific customers needs Marketing and distribution The main distribution channels are retailers and resellers, telemarketing, online through the website and web shops, field marketing and customer services. In Norway, where the Group s largest operations are, close to 90% of sales are generated through retailers and resellers, customer services and the web shop. The following table shows sales by different distributions channels in Norway, Sweden and Denmark. NORWAY SWEDEN DENMARK Telemarketing 2% Retail & resellers Customer Service 25% 8% 34% Webshop 31% Direct sales Source: AINMT Marketing activities focus on highlighting the Group s unique geographical coverage, robustness of its services and superior devices that can be used in non-traditional places like boats, cars and cabins. The service is marketed to residential customers as a primary or secondary mobile internet access connection. A primary connection is used on a day-to-day basis as an alternative to fixed-line internet access. As a secondary connection, the service can for instance be used in holiday homes, boats and as internet in cars. The B2C communication strategy exploits seasonal peaks with tactical, sales-driving communication. The service is marketed to business customers as a truly mobile connectivity solution across Scandinavia. Communication is focused on building evidence and truthfulness, strengthening the brand. Sectors for which the Group provides a unique solution include the energy, transport, forestry and mining sectors. Building a credible positioning around coverage, unique devices and mobility is important to reach the customers alongside the competition s communication. The B2B and B2C strategies form an efficient communication, contributing to a strong conversion to sales. In terms of advertising awareness, media exposure is strong when present. Broad media exposure is critical where commercial TV, print, magazines and strong online presence form the basis of the media strategy. Page 18 of 44

20 REGISTRATION DOCUMENT Norwegian operations Mobile broadband services The ice.net brand was launched in 2006 and is a registered trademark with Ice Norge AS being the concessionary company. The Norwegian operation holds two frequency licenses, one for the 410 MHz band and one for the 450 MHz band. Both licenses expire on 31 December The Norwegian network comprises of 551 radio base stations as of June The network covers approximately 75% of the geographical area, 91% of the population and 80% of the cabins, based on the Company's own estimates. The network is currently being upgraded to 4G LTE technology Mobile telecommunications In December 2013, Ice Communication Norge AS (formerly named Telco Data AS) was awarded three blocks spread over the 800, 900 and 1,800 MHz bands in the Norwegian frequency license auction. All frequencies acquired in the auction are well suited for 4G LTE technology. At the time Ice Communication Norge AS was owned 100 % by Access Industries, but was subsequently transferred to AINMT Holdings AB as a contribution in kind ( apportemission ) on 17 March Ice Communication Norge AS is AINMT s mobile telecommunications operating company for the Norwegian market, its licenses acquired in 2013 are valid until 31 December Another important milestone for the business expansion in Norway was the national roaming agreement signed with TeliaSonera on 5 February 2015 covering the Norwegian market and acquisition of certain network assets from Network Norway, including its customer base of business customers. Through the roaming agreement with TeliaSonera, customers will have service even if the customer is outside the Group s coverage area. The roaming agreement will regulate the prices for calls and data usage between the operators. Having a roaming agreement means that the Group buys network access from TeliaSonera. The handover session between the different networks are partly done by the handset, partly done in core. The control of the customer remains with the Group at all time. The Group is currently developing and increasing its Norwegian organization to ensure sufficient resources, both on the technical side for building and maintaining the network and on the sales and marketing side to drive the growth. Furthermore, the product department will be extended to handle all elements of being a voice operator in addition to the existing mobile broadband business. ice.net customer care is an organization with a high focus on sales conversion and anti-churn efforts, in addition to serving other customer cases. All agents undergo comprehensive sales training regularly, resulting in top-class sales and low anti-churn rates. Existing business will be expanded to cope with mobile voice both for sales and service Swedish operations Mobile Broadband and Voice over IP services Since May 2010, the Predecessor Group s operations in Sweden have been carried out under the net1 trademark. Prior to 2010, the ice.net trademark was also used in Sweden. NMT obtained the 450 MHz frequency license in This spectrum was previously used by TeliaSonera s analogue NMT 450 network. In 2007 broadband internet and Voice over IP ( VoIP ) telephony services were launched following the roll-out of a CDMA2000 network. Nordisk Mobiltelefon AB (business acquired by Netett Sverige AB by buying the bankruptcy estate) acquired the 450 MHz license through an auction held by the Swedish Post and Telecom Authority in 2005 for SEK 86 million. A second license was granted at no extra costs in 2007 as TeliaSonera s corresponding license expired. The two licenses are valid for 15 years and will expire 4 March Net1 is the only operator of the 450 MHz frequency in Sweden. The Swedish network comprises of 468 base stations. The network provides approximately 95% geographical coverage. The network is currently being upgraded to 4G LTE. Page 19 of 44

21 REGISTRATION DOCUMENT Danish operations Mobile broadband services The Predecessor Group s operations in Denmark have been, as in Sweden, carried out under the net1 trademark since Before 2010 the trademark ice.net was used. The Issuer owns 90.32% of the Danish operations and EnergiMidt Fiberbredbånd A/S owns the remaining 9.68%. EnergiMidt Fiberbredbånd A/S is a Danish energy company owned by EnergiMidt Holding a.m.b.a. EnergiMidt has been an important customer since 2007, and when NMT went into administration in March 2009, EnergiMidt exercised its pledge over the shares in Nordisk Mobiltelefon Denmark A/S. Ice Danmark ApS (formerly Nordisk Mobiltelefon Denmark A/S) won the 450 MHz license auctions held by the Danish National IT and Telecom Agency in 2006 and The purchase price was DKK 21 million, the licenses came into effect 24 January 2007 and 16 December 2010, respectively, and will both expire 23 January Ice Danmark ApS is the only operator of the 450 MHz frequency in Denmark. The Danish network comprises of 29 basestations. The network provides approximately 98% geographical coverage. The whole network has been upgraded to 4G LTE during Strategy The Group s existing strategy has been focused on strengthening its strong position in the Scandinavian dedicated mobile broadband market. In Sweden and Denmark the Group will continue to focus on the complementary aspects of the 450 MHz frequency band, coverage in remote areas, redundancy (2nd line) given the importance nowadays for customers to have access to the internet and capacity (in urban areas). The planned network upgrade to 4G in Sweden and Denmark will provide a significant increase in speed and capacity whilst maintaining its superior coverage advantage. At its core the operations in Sweden and Denmark will continue to focus on maximizing capacity utilization of the network. The December 2013 frequency auction in Norway provided a unique opportunity for the Group to acquire a significant amount of 4G spectrum. The combination of 1) ever growing demand for data capacity, 2) highly efficient 4G/LTE technology and 3) having no legacy to support, will allow the Group to build a state-of-the-art network able to capture this demand. The mobile voice/smartphone segment currently represents approximately 50% of total telecommunication revenues in the market approximately 10 times the Group s current market segment. The Group has according to its own estimates the best coverage in Norway on dedicated mobile broadband where the 450 MHz frequency is used in combination with 800, 900 and 1,800 MHz. With the combination of high and low frequencies, the Group has the flexibility to invest in infrastructure to support more capacity when needed, instead of needing to build for coverage from a standing start. With the limited number of customers today, the Norwegian management team can offer superior products in terms of speed and capacity since mobile data is a scarce resource (more traffic means less capacity for each user) for many years. Furthermore, the lower cost per produced gigabyte than competing network operators enables flexibility with regards to pricing models and packaging of the product. The excess capacity will also position the Group as an ideal wholesale partner to other operators and service providers, a business model with limited additional operating expenditures. The Norwegian telecommunications business kick-started in Q by the acquisition of the business segment from Network Norway, adding almost 70,000 business customers to its subscriber base. 6.2 Basis for statements regarding competitive position Competitive Strengths The Group s business benefits from the following key strengths: Page 20 of 44

22 REGISTRATION DOCUMENT Best coverage through the 450 MHz frequency band The Group s current network offers excellent mobile broadband coverage across the countries in which it operates. The strong coverage enables the Group to provide its customers mobile internet access in areas where alternatives do not exist, or the existing alternatives provide a low quality of service or are comparatively expensive. The Group further differentiates itself from competitors as a truly mobile service, providing internet access to customers who travel. The Group offers free roaming across its operations allowing customers to cross borders within Scandinavia using the services on its own network without extra charges on top of their price plans. This is beneficial for owners of holiday homes across borders within Scandinavia and transport companies with routes across the countries where the Group is present New high frequency telecommunication network in Norway In December 2013, the Predecessor Group secured licenses to operate the 800 MHz, 900 MHz and 1,800 MHz frequency bands in Norway. Operators use lower frequency bands for coverage in rural areas and higher frequencies for capacity in urban areas. As smartphones typically operate on frequency bands from 800 MHz, the 800 MHZ frequency band is ideal to provide coverage for smartphones to low density populations such as in Norway. The Group has no legacy network on these frequencies, allowing a state-of-the-art LTE network roll-out on these frequencies. From the acquisition of sites from Tele2 the Group has overtaken a number of 3G- and 4G base stations to be upgraded as well, however the Group the main upside is that the Group will be able to produce data at a lower cost than competitors with legacy networks to support Unique end-user devices The mobile broadband routers and/or modems used by the Group s customers are easy to use A wireless network connection is triggered automatically after plugging the modem into a power outlet. As the broadband is mobile and the modem provides WiFi access, it allows access from different locations and to multiple users Significant cost advantages Given the comparatively lower number of base stations, the Group operates on a lower fixed cost base compared to operators that operate on higher frequencies which require more base stations to cover a similar area. On average, the Group estimates total yearly operating costs of a base station to approximately NOK 180,000, including site lease, transmission, power supply and other maintenance. The new licenses in Norway acquired by the Group are not subject to national coverage requirements, while competitors often have acquired licenses with greater coverage but also with significantly higher network investments needed to fulfill their obligations Low churn rates in the mobile broadband market In the Group s view, a significant part of the Group s subscribers uses the mobile internet access in areas where there is no alternative, or where alternatives provide a low quality of service or are comparatively expensive. This unique service offering encourages lock-in of the customer and limits churn High ARPU in the mobile broadband sector Given the absence of a data cap, fixed-line internet access subscriptions are generally used as a first choice ( primary ) internet access connection, for instance as a home or office internet connection. As most mobile internet access connections have a data cap, these connections are generally used adjacent to a primary internet connection as a second choice ( secondary ) internet access connection in case the primary internet access connection is not available, for instance, while traveling or in summerhouses. Primary internet access connections are therefore characterized by higher data usage than secondary internet connections. In the Group s view, a significant part of the Group s subscribers uses the Group s mobile internet access in areas where there is no alternative, or where alternatives provide a low quality of service or are comparatively expensive. Given the absence of alternatives, a larger share of the Group s subscribers uses their internet Page 21 of 44

23 REGISTRATION DOCUMENT access connection as a primary internet access connection than other mobile telecom operators. The average mobile data usage of the Group s customers is therefore generally higher than that of other mobile telecom operators resulting in higher ARPU s Competitive pricing As a result of the cost advantage, as specified above, and the lean operational structure with no legacy costs, as specified below, the Group operates on a low fixed and variable cost base. The cost of producing incremental data is therefore low compared to mobile data operators with a higher fixed and variable cost base resulting in higher operating margins. High operating margins allow the Group to offer competitive pricing, if market conditions demand this, whilst remaining profitable Clear market positioning with high consumer impact The Group offers mobile internet access in areas where no alternative exists, or where alternatives provide a low quality of service or are comparatively expensive. The Group is therefore positioned in these markets as the mobile telecom operator of choice providing a service that would not exist without the Group s presence. The unique coverage proposition also positions the Group as the only true mobile data internet access service provider. The Group therefore provides a unique and valuable service to individuals and companies that require mobility for their data internet access connection Solid and broad distribution network To ensure stability of sales, the Group uses a variety of sales channels and multiple sales partners per sales channel to market its products and services. The main sales channels are customer service, retail and web sales, where sales are mostly organic and driven by marketing activities. Telemarketing and field-marketing channels are also selectively used to mainly support sales seasonally or to support marketing activities Lean operational structure with no legacy costs The Group currently has 130 employees across all its operations, main part in Norway due to the new telephony business. The Group benefits from operating a network with few equipment suppliers limiting the complexity of its operations. External partners are assigned to operate customer service in Norway and Sweden and the logistics and billing function for all operations. Apart from sales from in-house account managers for the largest business customers, the Group mainly uses external partners to drive sales. A lean organisation with a homogeneous network and outsourced operations ensures the Group can respond quickly to changes in the market from a low and variable cost base. 6.3 Investments The Group is currently investing in upgrading and building new networks in all operating countries. Investments include upgrades of the core network for LTE and VoLTE, upgrades of and additional base stations and IT systems, including enhanced IT systems as billing and OSS (Operational Support Systems). The investments set out above are and will mainly be financed with proceeds from the Bond Issue. On 9 October 2015 NOK 423 million was injected by AINMT Holdings AB (the Issuer s parent company) to the Issuer as share capital increase in order to facilitate upgrading costs, in relation to the recently acquired sites from Tele2 (see section for details regarding this transaction). The remaining outstanding investments will be financed through existing cash-flow. There have been no significant investments made by the Issuer or the Guarantors since the last published interim financial statement (quarterly report as of June 30, 2015). In the next years the Group (including the Guarantors) will make significant investments in relation to the implementation of new network and capacity expansions, both on existing and new sites. As of now the Group has not made any firm commitment to any third parties nor will authorities for such investments, and the investments will be funded gradually as upgrades are required and financing is available. Page 22 of 44

24 REGISTRATION DOCUMENT 6.4 Description of Group Legal structure of AINMT The Issuer, AINMT Scandinavia Holdings AS, is owned to 100% by AINMT Holdings AB. All of AINMT Scandinavia Holding AS' subsidiaries are wholly owned, with the exception of Ice Denmark ApS which is owned % by the Issuer. The ultimate holding company is Access Industries Inc, which is a privately held American holding company founded in It currently owns 76.93% of AINMT Holdings AB. 6.5 Dependence upon other entities The Issuer is a holding company with no day to day business. All cash flow to service the bonds and its daily operations is generated in the Guarantors. The parent company, AINMT Scandinavia Holdings AS, has issued a letter of support valid until 31 December 2015 which promises to secure the liquidity necessary for the planned activities in Ice Danmark ApS so that the Company may be regarded as a going concern. No other companies in the group are dependent upon other entities within the Group. Page 23 of 44