Lumi Education Group AS (LUMI) Earnings Call Transcript & Summary
May 7, 2024
Earnings Call Speaker Segments
Unknown Attendee
attendeeHi. Yes. I can hear.
Ole Henrik Wille
attendeeYes. Great. Okay. Hello, everyone. Welcome to the Annual General Meeting in, Lumi Gruppen. My name is Ole Henrik Wille. I'm lawyer from Wikborg Rein. The reason why I'm here is that the Chairman of the Board, Mr. Helge Midttun, unfortunately, called him sick this morning. So, I've been asked by the Board on a short notice to open and lead the meeting in his absence. So, I resume then to the Norwegian Companies Act Section 5-2, I hereby open the meeting. And in today's meeting, I'm joined by the company CEO, Erik Brandt; CFO, Martin Prytz, and then we have [ Rene ] from Nordea who can help us with the attendance. So [ Rene ]
Unknown Analyst
analystYes.
Ole Henrik Wille
attendeeDo you have that ready? Yes.
Unknown Analyst
analystThe total number of shares in the companies is 58,034,676. Since the company has owned shares for 193,814. So therefore, it's 57,840,862 shares with voting rights. And the percent of common shares is 34,582,720. What is then 59.79%. Represented by advance vote is 6,200,278, 10.72%. And represented by proxy is 5,045,934, that's 8.72%. And represented by voting instruction, 5,523,693, 9.55%. So total represents with voting rights is 51,352,565, which is then 88.78% of the share capital.
Ole Henrik Wille
attendeePerfect. Thank you. And the more detailed list of represented shares will be attached to the meetings, which will be published on the company's website after this meeting. So we then can move to Item one and 2 on agenda, which is election of the chair of the meeting and a person to cosign the minutes. It's proposed that I will chair the meeting and Martin Prytz, the CFO, will cosign the minutes. Does anyone have any comments or questions to this? Good, then that's approved. Now we can move to the Item 3 on the agenda, which is approval of the notice and the agenda. And the notice to this General Meeting, including the agenda, was sent to shareholders with notice on 23 April, 2024. And on the same day the notice, the attached documents were published through a stock exchange notice and made available on the company's website. Are there any questions or comments to the notice or agenda? Then I can say that that's approved. And we can move over to Item 4 on the agenda, which is approval of the annual account and the Board of Directors Report. The annual accounts are available on the company's website. And proposed resolutions is that the company's annual accounts and Annual Report for the financial year to 2023 are approved. So are there any questions or comments to the annual accounts? No. Then we can say that the annual accounts and Annual Report for financial year 2023 are approved. Then we move over to Item 5, which is approval of the remuneration to the auditor for the financial year 2023, where the Board has proposed that the General Meeting resolves to pay the auditor as invoiced. Anyone has any questions or comments to that? No. Then the General Meeting approves auditor's fee for the financial year 2023 in accordance with the auditor's invoice. Then we can move over to Item 6 on the agenda, which is approval for remuneration for the members of the Board of Directors. And the following has being proposed that the remuneration is NOK 550,000 to the chairman, NOK 250,000 to Board members and NOK 25,000 to the employee representative. And this applies for the period for the General Meeting for 2023 until General Meeting for 2024. Any questions or comments to that? No. Then we can also say that that is approved. Then we have approval of remuneration to the members of the audit committee where it's proposed that the chair receive remuneration of NOK 60,000 and the member NOK 30,000. And this also applies for a period until the Annual General Meeting for 2024. Any questions or comments to that? No. Then also that is approved. Then we have Item 8 on agenda, which is approval of remuneration for members of the remuneration committee, where it's proposed that the share will receive a remuneration of NOK 25,000 and member NOK 12,500. And it's same period, meaning until the Ordinary General Meeting for 2024. Any questions or comments to that? No. Then also Item 8 on the agenda is approved. Then we can move to Item 9, which is the Board authorization to increase the share capital by issuance of new shares. And the references made to the proposal by the Board as included in the notice. And I will not read the whole proposal unless anyone requires me to do that. And so maybe we can just move straight to the voting or are there any questions or comments before we do that. So propose 2 different [ power ] alternatives. So this is the first one, the general power alternative to issue shares, and then they have a separate one for a repair issue.
Unknown Attendee
attendeeLet's vote.
Ole Henrik Wille
attendeeOkay, should we vote?
Unknown Attendee
attendeeOkay.
Unknown Attendee
attendeeCan you use the…?
Unknown Analyst
analyst[indiscernible].
Ole Henrik Wille
attendeeAnd this requires 2/3 majority by the votes casts from share capital of company.
Unknown Analyst
analystAnd then the final count is, represented for is 61.78 and against 38.23. And since you need 2/3, then the…
Ole Henrik Wille
attendeeIt's not approved. Again, repeat, 61 point…
Unknown Analyst
analyst78. You would get the for.
Ole Henrik Wille
attendeeYes. And against was…
Unknown Analyst
analyst38.23.
Ole Henrik Wille
attendeeYes. Since this requires 2/3 majority of the votes cast in the General Meeting this proposal has then not been approved. Then we move over to Item 10 on agenda, which is Board authorization to increase the share capital to conclude on a repair issue. Reference here is made to the stock exchange notice on 16th April regarding the conversion of parts of the loan to Lola Bidco, which is an affiliate of another larger shareholder of the company, to a subscription price of NOK 10 per share. Where the Board has proposed that the company shareholders shall begin opportunity to vote on whether the company should carry out a repair issue or not by issuing them a specific borrower alternative to the Board in connection with that. Any questions or comments before we move to voting? Okay. Then can we vote on Item 10 on the agenda?
Unknown Analyst
analystAnd the final count is that it's for 39.50%, and against exactly 50% over extended capital.
Unknown Attendee
attendeeCan you repeat that again? Can you repeat?
Ole Henrik Wille
attendeeSo shares…
Unknown Analyst
analystAgain for 39.50% against 60%.
Ole Henrik Wille
attendeeOkay, so not approved.
Unknown Analyst
analystYes.
Ole Henrik Wille
attendeeOkay. Then we can move over to the last item on agenda, which is election of Board members. Helge Midttun has…
Helge Midttun
executiveCan I just ask a question for the majority shareholder here that voted against this repair issue?
Ole Henrik Wille
attendeeYes, sure. It's representative sitting there.
Helge Midttun
executiveI respect the casting of votes. That's the way it is conducted. The company has outstanding debt, and the repair issue would solve that issue. Why are you jeopardizing the liquidity of the company?
Unknown Attendee
attendeeYes, I can comment on that.
Ole Henrik Wille
attendeeWell, there's no outstanding debt, which is…
Helge Midttun
executiveSecond tranche is outstanding. Yes, but that's not due for payment before 1 years' time or something like that. Yes, company borrowed in the money and the second tranche capital need was there. We're willing to support that as a minority shareholder. And We're saying yes to that, whereas the majority shareholder is saying no. Just want to have the arguments why, they vote the way they do.
Ole Henrik Wille
attendeeYes, I'm not representing the majority shareholder here today, so I cannot answer that. But there's no debt that's due for payment now. So what was the majority debt under loan was the part that was converted NOK 25 million. And then you have remaining outstanding amount of the loan, which will be for -- due for payment in 1 year time. And then I guess it's up to the Board at that point in time to discuss what they do with repayment. So as a representative for the company, it doesn't make sense to prepay any debt.
Helge Midttun
executiveNormal practice in the legislation is that one does a repair issue towards the shareholders that were not able to participate in this conversion, right?
Ole Henrik Wille
attendeeYes. Well, that's a concrete assessment where you look at the size of the private placement, et cetera, and the Board's assessment in this regard, and Wikborg Rein provided them with a legal assessment of that is that, if you want to do rights issue here that will be too time consuming and costly when you look at the size of the private placement. And since it was down to more or less the same price as the current stock price on the stock exchange, the Board had valid reasons for not doing a repair or invite all shareholders in that private placement. The only alternative was offered was that 3 other shareholders, and they came in quite late, wanted to underwrite the private placement. But that wouldn't change the whole assessment of equal treatment of shareholders, because then you have to invite everyone. Right? So that doesn't change that assessment. That's on the -- for the company.
Unknown Attendee
attendeeWhat was Wikborg Rein estimated cost of performing a rights issue or this repair issue? That's question number one. And what's also Wikborg Rein's recommendation when it comes to dilution of the shareholders when it comes to them, size, price and any other factors you advised?
Ole Henrik Wille
attendeeYes. On the right issue, you need to have a settlement agent, et cetera. And we checked with investment banks so that the cost for that will be between NOK 1.5 million to NOK 2.5 million to do the whole -- to do a rights issue, inviting everyone, preparing a prospectus, all of these things. And on dilution, since it was, also such a small amount, you didn't change any organizational rights or any shareholders. So, of course, the assessment would be completely different if would have resulted in some shareholders going under certain thresholds or something like that. But that was not the case here. So -- but we can share the memo with you if you want to do that.
Unknown Attendee
attendeeWe'd love to see that.
Ole Henrik Wille
attendeeYes, yes.
Unknown Attendee
attendeeAnd the cost, why NOK 1.5 million to NOK 2 million?
Ole Henrik Wille
attendeeBecause you need to have an investment bank doing the settlement right. Because you have to reach out to all shareholders and then you have to file a prospectus, since you also have to. So -- and it will also take time.
Unknown Attendee
attendeeBut do you need to have an investment bank?
Ole Henrik Wille
attendeeYes. Someone needs to do the whole -- certainly won't invite all shareholders of a company in a private placement. The company cannot do that, as you know.
Unknown Attendee
attendeeCan't the company do that?
Helge Midttun
executiveI think that's carrying a practical work. You only KYC and set that to work. That doesn't work. I think that's fairly obvious.
Ole Henrik Wille
attendeeHow many shareholders this company have? So you mentioned the company and then start KYC everyone. And do this expense, check VPS accounts, et cetera. That's more practical. And I never heard of any companies -- these companies…
Unknown Attendee
attendeeBut did you reach out to any investment bank to ask to get a quote to do this?
Ole Henrik Wille
attendeeYes. Yes. For check and also based on our experience. Yes.
Unknown Attendee
attendeeOkay. Okay.
Ole Henrik Wille
attendeeOkay. To the next point on agenda, which is election of Board members. As mentioned, Helge Midttun has informed the company that they want to step down as the chairman, and the new proposal is that of Rob Woodward, takes the position as new chairman of the company. His CV has been disclosed. Any questions or comments to that? No. Should we then, vote?
Helge Midttun
executiveI don't know if there are any who attended would move to written voting. Otherwise, the system will prevote that you are for, all of you. You want a written solution?
Unknown Attendee
attendeeI can write one.
Helge Midttun
executiveYes. But…
Unknown Attendee
attendee[ Username ]
Helge Midttun
executiveYes, if you are for, without username. Then this is the [indiscernible].
Unknown Attendee
attendeeIf anyone, you either want to object for, you wanted to have a written both, then I will ask you all support it.
Unknown Attendee
attendeeBut this is a 50%, yes, so it doesn't really matter for me. But yes.
Ole Henrik Wille
attendeeYou don't you don't need a written note. Okay. Then that's, approved. Thank you. There's no general items on the agenda, and the General Meeting is hereby adjourned. The minutes, with the list of attendants, et cetera, will be published through a stock exchange notice and on the company's website. So thank you all for participation in this meeting.
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