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Financial Press Releases

28 March 2011 €17 million OBSAAR issue with preferential subscription rights

SQLI draws investors’ attention to the risk factors set out in the Prospectus. The AMF-approved Prospectus can be obtained on request, free of charge, from SQLI and from the websites of AMF (www.amf-france.org) and SQLI (www.sqli.com).

The SQLI Group today announced the launch of a €17 million bond issue comprising the issuance of 85,000 bonds convertible into new and/or exchangeable for existing shares (“OBSAAR”) with a unit face value of €200. The issue is described in prospectus number 11-085 issued by the AMF French markets authority on 25 March 2011.

“We have launched a development plan for 2010-2014 designed to significantly bolster the added value of our offering on a permanent basis for the benefit of our customers, our employees and SQLI’s shareholders. The first effects of this plan will be visible in our 2010 financial results, which will be published after close of trading on 30 March and feature a full-year current operating income figure of €2.6 million, compared with a loss of €0.3 million in the first half. The bond issue will give us additional room for manoeuvre to speed our expansion,” said SQLI CEO Julien Mériaudeau.

The proceeds from the issue will be used to pay down financial debt amounting to €7 million, to finance the Group’s organic growth by strengthening its working capital and to fund any targeted acquisition-led growth opportunities. Part of the funds raised (€3.4 million) will be paid to SQLI in May 2012 if current operating income in 2011 is above €5 million.

Exercise of all the BSAAR redeemable equity warrants would also strengthen the Group’s equity capital by €13.6 million (nominal and issue premium) through the issuance of 9,095,000 new shares representing 20% of the share capital and 17.82% of voting rights) at a unit price of €1.50.

The issue comes with preferential subscription rights for existing shareholders. The chosen issue parity is 1 OBSAAR for each 429 shares owned, each OBSAAR comprising 1 bond and 107 BSAAR warrants. The BSAARs, which have a lifespan of seven years, will be non-exercisable and non-transferrable for an initial lock-up period of three years. The subscription period runs from 30 March to 11 April 2011 inclusive. SQLI intends to associate Group executives with this development project and with the stock market performance of company shares by offering them the opportunity to acquire any BSAARs not taken up by other shareholders.

The issue benefits from a firm underwriting commitment from Banque Palatine, Société Générale, and BNP Paribas, for any OBSAARs not taken up by shareholders, and covering the entire debt issue.

Non-Executive Chairman Yahya El Mir has also made known his intention to step down at the 29 March 2011 Board Meeting. Dominique Chambas, an SQLI Board member since 2002, is slated to succeed him.

SQLI will publish its 2010 annual results on 30 March 2011 after close of trading.

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