Aker Maritime and Kvaerner Reach Agreement on a Solution

Wednesday, November 28, 2001
Kvaerner today announced that it has reached agreement with its largest shareholder, Aker Maritime, on a comprehensive industrial and financial solution for the Kvaerner Group. This solution means that Kvaerner will secure new equity through a Directed Equity Issue, a subsequent Rights Issue, and through the merger of Aker Maritime's core business with Kvaerner Oil & Gas. It builds on the principles of the modified Yukos plan presented by Aker Maritime last week. Kvaerner's other large shareholder, Russia's Yukos Oil, has announced its support for the new solution.

The main elements of the agreement are as follows: * A merger of Aker Maritime and Kvaerner Oil & Gas. Aker Maritime is valued at NOK 3.6 billion, including NOK 800 million in debt. The conversion rate will be based on the subscription price in the new issues. * A Directed Equity Issue of at least NOK 2 billion. The subscription price will be set in the range of NOK 4-8 per share through book-building. * A Rights Issue for Kvaerner shareholders, as of December 14. The value of this issue will be up to NOK 1.5 billion, at the same price per share as the directed Equity Issue. Oil and gas merger The agreement between Aker Maritime and Kvaerner involves the merger of Aker Maritime's core operations with those of Kvaerner Oil & Gas. This will create a strong new player in the petroleum industry, with a substantial potential for international growth. Aker Maritime and Kvaerner Oil & Gas complement each other, both in terms of technology and products, and within operations and maintenance. In the field development sector, the aim is to specialise the companies in order to become more competitive internationally. A merger requires thorough assessment and the co-operation of employees, and needs to be implemented through an understanding with the relevant authorities and governmental bodies. The value of the businesses being transferred amounts to NOK 3.6 billion, of which debt accounts for NOK 800 million. Compensation to Aker Maritime will take the form of newly issued Kvaerner shares. The price of these shares will be the same as that set for the planned new issues. Issues Kvaerner's financial position will be strengthened with the provision of new equity through two Issues, totalling NOK 3.5 billion. The first of these will be a Directed Equity Issue of at least NOK 2 billion, at a price per share to be determined by the market within the range of NOK 4-8, through a book-building exercise. With the agreement of Kvaerner's board and financial advisers, Aker Maritime has engaged Carnegie, Orkla Enskilda and Pareto to co-ordinate these issues. Aker Maritime has undertaken to participate in the issues up to NOK 500 million.

Other existing shareholders will have the opportunity to maintain their relative holding in Kvaerner by subscribing to a subsequent Pre-emptive Rights Issue of up to NOK 1.5 billion. This will be implemented in January at the same price per share as the Directed Equity Issue. Following the merger and injection of new capital, Aker Maritime's shareholding in Kvaerner will amount to approximately 50 per cent.

Changes to loan terms Kvaerner's financial freedom will be further strengthened by the deferral of debt repayments of approximately NOK 4.5 billion, for a period of 10 years. This debt will be interest-free for the first five years, and the banks have waived their right to convert this debt into equity.In addition, the repayment of a further approximate NOK 4 billion of debt has been deferred for three years.

In connection with the proposed agreement, Kvaerner has been in dialogue with a group of lenders supporting work on the plan. These include DnB and Nordea, as well as Norsk Tillitsmann on behalf of the certificate and bondholders. In consideration of Kvaerner's future, and to safeguard the major assets held by the Company in the form of expertise and jobs, these lenders wish to avoid a liquidation and are contributing to a positive solution for the Company. Terms and the way forward This revised plan for Kvaerner will be presented to the company's shareholders for final approval at a new Extraordinary General Meeting to be held no later than December 19. The rescue plan is conditional upon the surplus liquidity from Kvaerner Masa-Yards and other subsidiaries being released to Kvaerner's cash pool by 20 December at the latest, and that all lenders accept the revised lending terms. Notification of the new EGM, with a detailed account of the revised plan, will be sent to all shareholders by December 5.

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