A new world-leading mining and smelting company - New Boliden - is born
Boliden and Outokumpu have today completed the transaction whereby
Boliden acquires Outokumpu's mining and smelting operations within zinc
and copper and sells its fabrication and technology sales operations to
Outokumpu. New Boliden becomes one of the world-leading mining and
smelting companies within zinc and copper. New Boliden starts operations
on January 1, 2004.
- There is a clear logic in combining Boliden's and Outokumpu's mining
and smelting operations within zinc and copper. In New Boliden, world-
class assets are now combined, which with increased competitive strength
from a strong Nordic base will be able to create long-term profitability
and substantial growth potential. New Boliden will also get a strong
industrial owner with long experience and extensive knowledge of the
mining and smelting industry. All this will create added value for
shareholders, customers and employees, says Jan Johansson, President and
CEO of Boliden.
The transaction has now been completed as planned, as all conditions to
the completion of the transaction have been fulfilled. According to
latest estimate available at closing, the total consideration will be
EUR 849 million (SEK 7.7 billion). The increase is primarily due to
estimated changes in the capital employed of the acquired mining and
smelting assets during 2003. Boliden's consideration to Outokumpu for
the acquired mining and smelting assets consists of:
· issuance of new shares in kind to Outokumpu, corresponding to
49 percent of all shares in New Boliden
· cash payment of EUR 373 million (SEK 3.4 billion) and
· issue of a subordinated debenture to Outokumpu.
The final consideration will be adjusted depending on the closing
accounts of the transaction, which will be finalized in March 2004 at
the latest. Any changes in the capital employed of the acquired assets
in the closing accounts will be reflected in the subordinated debenture
part of the total consideration. It is currently estimated that the
subordinated debenture will amount to some EUR 137 million (SEK 1.2 billion).
As a partial payment for the mining and smelting assets that Boliden
acquired from Outokumpu, Boliden has today issued and Outokumpu has
subscribed for 82 446 475 new shares in Boliden AB. Following the
subscription, Outokumpu now owns 49 percent of all the shares and votes
in Boliden, and has no intention to increase such holding and will not
seek a majority position. Outokumpu may in time decrease its
shareholding in Boliden by way of well-controlled transactions. Based on
the closing price of the Boliden share on the Stockholm stock exchange
on December 29, 2003, the total value of issued shares is some EUR 339
million (SEK 3.1 billion). The increase in Boliden AB's share capital
will be registered with the Swedish Companies Register in early January.
The new shares will be registered to Outokumpu's securities account on
or about January 7, 2004 and will be eligible for trading from thereon.
The new shares are entitled to full dividends as from the financial year
that commenced on January 1, 2003, and carry the same rights as all
other outstanding shares in Boliden.
Following the registration of the increase in Boliden's share capital
Boliden's share capital will amount to SEK 336 516 226 consisting of
168 258 113 shares.
As a payment for the fabrication and technology sales operations that
Outokumpu acquired from Boliden, Outokumpu has today issued, and Boliden
has subscribed for, 5 000 000 new shares in Outokumpu Oyj in deviation
of the shareholder's pre-emptive subscription right. Following the
subscription, Boliden now owns 2.8 percent of all the shares and votes
in Outokumpu. Based on the closing price of the Outokumpu share on the
Helsinki Exchanges on December 29, 2003 the total value of the issued
shares is some EUR 53.3 million (SEK 484 million). The corresponding
increase in Outokumpu Oyj's share capital will be registered with the
Finnish Trade Register on or about December 31, 2003. The new shares
will be registered to Boliden's account at the Finnish Central
Securities Depository on December 31, 2003 and will be eligible for
trading on or about January 2, 2004. The new shares are entitled to full
dividends as from the financial year that commenced on January 1, 2003,
and carry the same rights as all other outstanding shares in Outokumpu.
Following the registration of the increase in Outokumpu's share capital
Outokumpu's share capital will amount to EUR 303 576 080.50 consisting
of 178 574 165 shares.
Boliden will consolidate all the assets acquired from Outokumpu at the
end of the fourth quarter 2003, while the results from these assets will
be consolidated as from January 1, 2004. The divestiture of Fabrication
and Technology Sales, which is a part of the total deal with Outokumpu,
is estimated to result in a loss for Boliden of approximately EUR 36
million (SEK 330 million), which will be accounted for during the fourth
quarter of 2003.
Outokumpu will de-consolidate all the assets sold to Boliden at the end
of the fourth quarter 2003, while the results from these assets will be
consolidated until the end of 2003. The assets acquired from Boliden
will be consolidated to Outokumpu at year-end. Outokumpu's gross gain on
the sale of its mining and smelting assets to Boliden is estimated at
some EUR 200 million, of which EUR 100 million will be booked in the
fourth quarter 2003 results as an unusual item and it will be tax free.
The deal is expected to decrease Outokumpu's gearing by some 40
percentage points. In addition to the EUR 100 million gain to be booked
in the fourth quarter, there is a deferred gain element corresponding to
49 percent of the gross gain. The deferred gain will be released in the
same period, as Boliden will amortize the consolidation goodwill arising
from the transaction. The deferred gain can also be released
proportionately in the event that Outokumpu's ownership in Boliden
decreases and entirely if Outokumpu's ownership in Boliden decreases
below 20 percent.
As the transaction was completed, the new Board of Directors of Boliden
AB took office. The Board of Directors of New Boliden consists of Mr.
Carl Bennet, Ms. Marie Berglund, Ms. Satu Huber, Mr. Jan Johansson, Mr.
Tapani Järvinen, Mr. Anders Sundström, Mr. Christoffer Taxell and Mr.
Risto Virrankoski. Altogether, the Board of Directors of New Boliden
comprises 11 members including also three personnel representatives
appointed by the labour unions. At its first Board meeting today, Mr.
Risto Virrankoski was appointed Chairman and Mr. Carl Bennet Vice
Chairman of New Boliden.
As previously announced, the Board of Directors of New Boliden intends
to use the authorization granted at the extraordinary shareholders'
meeting in December to carry out an issue of new shares with
preferential rights for Boliden's shareholders in the order of EUR 150
million (SEK 1.4 billion). The rights issue will be fully underwritten
and is expected to take place during the first quarter of 2004. Nordea
Securities and Swedbank Markets are acting as financial advisors to
Boliden in connection with the planned rights issue.
For further information, please contact:
Boliden
Jan Johansson, President and CEO
tel. +46 8 610 16 02, mobile +46 70 555 0202
e-mail: [email protected]
Ulf Söderström, Senior Vice President, Corporate Communication
tel +46 8 610 15 57, mobile +46 70 618 9595
e-mail: [email protected]
www.boliden.com
Outokumpu
Eero Mustala, Senior Vice President - Corporate Communications
tel. + 358 9 421 2435, mobile +358 40 504 5146
e-mail: [email protected]
Johanna Sintonen, Vice President - Investor Relations
tel. +358 9 421 2438, mobile +358 40 530 0778
e-mail [email protected]
www.outokumpu.com
Outokumpu Oyj has, in accordance with applicable Canadian securities
laws, filed a report detailing the transaction described herein. A copy
of such report can be obtained by contacting the Outokumpu
representatives identified above.