Tokyo, Japan, and Cambridge, UK, 7 July 2021 – Sosei Group Corporation (“Sosei”; TSE Mothers Index: 4565) today announces that its Board of Directors resolved on 7 July 2021 to issue euro-yen denominated convertible bonds due 2026 in an international offering as set forth below (the “Offering”), a portion of which will be used to repurchase Sosei’s existing outstanding convertible bonds due 2025 (the “Existing Convertible Bonds”), as well as to obtain new additional funds for accelerating Sosei’s strategic growth initiatives, including acquisitions and investments, and to lower funding costs, extend the maturity profile of its debt, and further strengthen Sosei’s financial base.

1. Use of Proceeds

The aggregate net proceeds of approximately ¥30.0 billion (approximately US$271 million*) from the Offering is intended to be used as follows:

(i)   up to ¥20.0 billion (approximately US$180 million*) will be allocated by the end of July 2021 toward the repurchase of Existing Convertible Bonds. The total amount used for the repurchase may be lower than the above amount depending on the number of bondholders who respond to the offer for repurchase, the amount of the Existing Convertible Bonds being repurchased, the number of Existing Convertible Bonds which had been converted into shares and other factors.

(ii)   approximately ¥10.0 billion (approximately US$90 million*) will, together with the approximately ¥20.9 billion (approximately US$189 million*) raised from the offerings announced on 30 June 2020 of shares of common stock and of the Existing Convertible Bonds, be allocated by the end of June 2024 towards strategic growth initiatives including: funding acquisitions of or investments in companies or technologies that complement Sosei’s business, including in the areas of neurology, gastroenterology, immunology and rare diseases, in order to strengthen Sosei’s existing business foundation for drug candidate discovery and early development; and funding potential introduction of drug products in the Japanese domestic market. In addition, any remainder from (i) above will be allocated by the end of June 2024 toward research and development of new pipelines and working capital.

　　　* All approximate US$ amounts were calculated at a spot FX rate of US$1 to ¥110.87 as at 6 July 2021.

2. The Offering

(1) New Bonds to be Offered

Sosei Group Corporation Euro-yen Denominated Convertible Bonds due 2026 (the “New Bonds”; the stock acquisition rights incorporated therein shall be referred to as the “Stock Acquisition Rights”).

(2) Issue Price

100.0% of par value (each New Bond shall have a denomination of ¥10,000,000).

(3) Amount to be Paid Upon Exercise of a Stock Acquisition Right

No cash amount will be payable upon exercise of a Stock Acquisition Right

(4) Closing Date and Issue Date

27 July 2021 (London time)

(5) Particulars of the Stock Acquisition Rights

The Stock Acquisition Rights are exercisable for shares of common stock of Sosei. Upon exercise, the number of shares to be delivered to the exercising bondholder shall be determined by dividing the aggregate principal amount of the bonds subject to the relevant exercise notice, by the conversion price then in effect.

(6) Particulars of the Offering

　(i) Method of Offering

　　The Offering will be underwritten by the Underwriters and will be conducted in the overseas market (excluding the United States) mainly in Europe and Asia.

　(ii) Offer Price

　　102.5% of par value

(7) Particulars of the New Bonds

　(i)  Aggregate Principal Amount of the New Bonds

　　　¥30,000,000,000 (approximately US$271 million*)

　(ii) Interest Rate

　　　0.25% per annum.

　　　Interest on the New Bonds is payable semi-annually in arrear.

　(iii) Maturity

　　　The New Bonds will be redeemed at 100% of their principal amount on 27 July 2026.

　(iv) Early Redemption

　　　The New Bonds may be redeemed prior to maturity upon, among other things, increased share prices and investor put.

3. Concurrent Repurchase and Cancellation of Existing Convertible Bonds

Sosei’s Board of Directors also resolved on 7 July 2021 that it will, concurrently with the Offering, repurchase the Existing Convertible Bonds. Sosei intends to achieve the following effects through the concurrent repurchase of Existing Convertible Bonds:

• By using part of the net proceeds from the New Bonds for the repurchase of the Existing Convertible Bonds, Sosei aims to lower its funding cost and extend the maturity of its debt;
• By using part of the net proceeds from the New Bonds, which may have a higher conversion price than the Existing Convertible Bonds, for the repurchase of the Existing Convertible Bonds, potential dilution per bond is likely to be reduced;
• Potentially better economic terms for the New Bonds through increased investor demand.

-ENDS-