The Kvaerner Group News

Agreement has been reached between Kværner and its largest shareholder, Aker Maritime, on a comprehensive industrial and financial solution for the Kværner group. This solution means that Kværner will secure additional equity through share issues and through the merger of Aker Maritime's core business with Kværner Oil & Gas. It builds on the main lines of the modified Yukos plan presented by Aker Maritime last week. Kværner's other large shareholder, Russia's Yukos Oil, has announced its support for the new solution and has withdrawn its original proposal. Negotiations are continuing with the bank coordinating committee on modified lending terms, and agreement on a recommended solution is expected within 24-48 hours.

January-September 2003. and a net sales of EUR 625 million (4.930 MNOK). increased by 10,7%. period of 2002. Eloranta, President and CEO of Kvaerner Masa-Yards. "In September 2003 Kvaerner Masa-Yards and Royal Caribbean Cruises Ltd. 2006, the Ultra Voyager. have seen in 2002 and 2003," continued Jorma Eloranta.

Not all stability software is made equal. Even if all commonly available stability programs were of the same quality, virtually all of them are designed first and foremost for conventional vessels - and it's no secret that the unique characteristics of offshore platforms demand capabilities not usually required for ships. Rig stability is a very critical issue, and it can also be quite complex. What rig operators need is software that can constantly monitor and predict stability in any combination of circumstances; but what they don't need is an interface as complex as the problem. Enter Autoload Rig. Only recently released, yet already installed on more then 15 platforms, Autoload has also been chosen for the biggest floating rig ever built: Thunderhorse.

DeepStar, a group consisting of 10 leading deepwater operators, has awarded Aker Kvaerner a contract for a study to develop a semisubmersible production platform for use in coming ultra-deepwater field developments. The study was won in competition with a number of deepwater floater expertise contractors, and Aker Kvaerner was awarded the contract based on the company's leading experience with deepwater floaters. DeepStar wants to get a credible solution for future developments in ultra-deep water depths down to 10 000 feet. In addition to the development of the floating platform itself, the scope includes other critical aspects such as design of the risers that will bring the oil and gas from the well to the surface. It also includes installation methods for mooring systems and risers.

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. Kvaerner Oil & Gas. It builds on the principles of the modified Yukos plan presented by Aker Maritime last week. Yukos Oil, has announced its support for the new solution. * A merger of Aker Maritime and Kvaerner Oil & Gas. Aker Maritime is valued at NOK 3.6 billion, including NOK 800 million in debt. issues. * A Directed Equity Issue of at least NOK 2 billion. book-building. * A Rights Issue for Kvaerner shareholders, as of December 14. per share as the directed Equity Issue. The agreement between Aker Maritime and Kvaerner involves the merger of Aker Maritime's core operations with those of Kvaerner Oil & Gas.

Kvaerner, the international engineering and construction group, announced that consents have now been secured from all creditors that are party to the debt restructuring in the group. The remaining key condition in the overall refinancing of the Kvaerner Group has thereby now been fulfilled. The other key elements in the refinancing scheme, a Directed Offering subscribed at the end of November 2001, and a Rights Offering, to be subscribed later this month, are proceeding according to plan. Formal closing of the debt restructuring and the Directed Offering are expected to take place tomorrow, and the Group’s internal cash pooling system will thereafter be fully operational.

Kvaerner, has launched a new company with 18,000 employees in 17 countries and on five continents. The new company, to be known as 'Aker Kvaerner', will supply products, services, technology and solutions worth NOK 20 billion a year to the global oil and gas industry. Aker Kvaerner is the result of a merger between Aker Maritime and Kvaerner Oil & Gas, and forms one of four business areas within the Kvaerner Group. Subsidiaries of Aker Kvaerner have already won contracts totalling NOK 15.5 billion since the start of 2002, almost doubling the Group's order backlog in just over two months. The many companies embraced by the new organisation…

Kvaerner announced its results for the three months ending March 31, 2002. Operating profit for the Kvaerner Group in the first quarter of 2002 amounted to $19 million, compared to a loss of $41.6 million in the previous quarter. Coming out of a difficult year in 2001, the Group has restored profitability. In the first quarter of 2002, three of the four business areas reported operating profits. Including $3.7 million of non-recurring costs related to the integration of former Aker Maritime units, operating profit in Aker Kvaerner was $9.7 million. Aker Maritime units were consolidated with effect from March. Kvaerner E&C (Engineering & Construction) reported an operating profit of $2.1 million, and Shipbuilding, $16 million.

The Kvaerner Group has published its first quarter 2002 results. Kvaerner Masa-Yards' business operations contributed to the Group results with an operating profit of $16 million. Kvaerner Masa-Yards' operating revenues for the period were $2,431 million. At the end of March, the unrecognized sales value of the orderbook was 1.3 billion. The operating profit of Kvaerner Masa-Yards Inc. according to Finnish Accounting Standards (FAS) was slightly higher than the figure reported by the Kvaerner Group for Kvaerner Masa-Yards. "The results of Kvaerner Masa-Yards for the beginning of this year shows that our productivity improvement program proceeds successfully.

The Kvaerner Group has decided to stop the progress of the present sale of Kvaerner Masa-Yards. While Kvaerner's long-term business strategy is to leave the shipbuilding industry, Kvaerner will focus on upgrading the performance of the yard to increase profits. Organizational changes will include the appointments of a new CEO and CFO, and the current chief executive of Masa-Yards, Martin Sarrikangas is slated to retire.

Aker Kvaerner Netherlands B.V., part of the Aker Kvaerner Group, has received a letter of intent, based on Contract Terms currently being finalised, to perform Engineering, Procurement and Construction Management Services (EPCm) for major BP Petrochemical and Refining sites in Germany. Under this contract Aker Kvaerner will perform Engineering, Procurement services and Construction Management services for small and medium size projects at the BP sites in Gelsenkirchen, Köln, and Marl with an option for Lingen also to participate. The duration for this agreement is five years with the possibility of further extension in terms of locations and duration. "This is an important and strategic frame agreement for Aker Kvaerner," says Jarle Tautra, executive vice president in Aker Kvaerner.

Aker Kvaerner Netherlands B.V., trading as AK Process, and part of the Aker Kvaerner Group, has become the first EPC contractor in the Netherlands to be certified by Lloyd's Register as a qualified manufacturer under the European Pressure Equipment Directive. A key benefit of the certification is that it will enable a significant reduction in the involvement of Notified Bodies in assessment and inspection during the engineering and construction phases of projects. As Wim van der Zande, President of AK Process, confirms, "This certification represents an important step in our drive to be a leading centre of project execution excellence for our industry. A core element of our management systems is to ensure proper quality levels on our delivered projects.

AK Engineering Services, part of the Aker Kvaerner group, has secured a multi-million pound contract to service two major onshore facilities for BP in the UK. The work will be performed by personnel from the firm's Stockton facility and from sister organisations in Aberdeen and Solent over the next three years. The scope of work covers the provision of engineering, modifications and maintenance services at BP's Wytch Farm production and transport facility in Dorset, and at the BP CATS (Central Area Transmission System) gas terminal on Teesside, North East England. The contract includes three further two-year extension options. Around 150 personnel from the three locations will be employed on the project.

Per Branstad, has completed his 2 year assignment to organize and integrate the three companies which together now comprise an important part of Kongsberg’s Marine and Offshore Operations. Branstad will now return to his specialist field within Kongsberg in the development of the Maritime Training Business. Commenting on the company’s performance during his tenure as President Per said “KMSS has continued to expand & reinforce its positive market position since the merger two years ago and I am delighted to hand over a fit enterprise to an enthusiastic new president. the Asian market, which is already the centre of the world ship building industry. worked for many years based in Indonesia, Singapore and Hong Kong.

Kvaerner has announced its results for the six months ending June 30, 2002. The positive trend in the Kvaerner Group continued in the second quarter. Profit before tax for the first half of the year was $69 million, compared with $27 million in the same period last year. Several special operating charges, sales and exchange gains are included in the accounts. Earnings before interest, tax and amortisation (EBITA) and excluding the exceptional gains and special operating charges, amounted to $66 million in the first six months. The combined effect of special items, sales gains and amortisation amounted to $31 million negative, and EBIT was $35 million in the six-month period. Kvaerner Shipbuilding improved its EBIT significantly from the first to the second quarter.

Aker Marine Contractors, part of the Aker Kvaerner group, has entered into an agreement with Taubåtkompaniet AS securing full marketing and operational control over the specialized offshore construction vessels "Boa Deep C" and "Boa Deep C II". The agreement runs for five years with options for extensions up to four more years, and is expected to significantly enhance the company's position in the deep water subsea and floating production markets. The new agreement builds on the positive results achieved following Aker Marine Contractor's introduction of "Boa Deep C" in May 2004 on contracts for Statoil, Woodside and Modec. The vessel has since its introduction seen almost full utilization, and is currently operating in the Gulf of Mexico.

Scandinavian passenger ship operators have specified Evac vacuum toilet and waste treatment for their latest newbuildings from Aker Kvaerner group yards in Finland. The 33,000gt/1,800-passenger vessel ordered by Birka Line from Aker Finnyards - dubbed the ‘Floating Caribbean’ - is designed to set new standards of year-round cruising in the Baltic after delivery in autumn 2004. An extensive range of accommodation and amenities spread over eight decks of the 11-deck ship will include a whole deck dedicated to passenger recreation and a large Spa area decorated with palms. Operating in the Baltic dictates a high priority on environmental friendliness in the design and equipment specification…

Even if Kvaerner Group is unsuccessful in selling its Philadelphia operation, Europe's largest shipbuilder does not plan to leave the shipyard high and dry. The firm announced it will sell or close its 13 shipyards around the world due to low profits, but would try to find a buyer for the Philadelphia shipyard. If a buyer is not found, "then Kvaerner must continue," said Harald Rafdal, CEO of Kvaerner Philadelphia Inc., sending a signal the shipping giant would not abandon the Philadelphia operation. The company was to be the prime tenant of a shipyard revitalization that would receive $430 million in state, city and federal subsidies, in return for an estimated 1,000 shipbuilding jobs and up to a total of 8,000 new jobs over time, including jobs created by suppliers.