Hydro to Demerge Agri
28 November 2003 - 10:06PM
PR Newswire (US)
Hydro to Demerge Agri OSLO, Norway, Nov. 28 /PRNewswire-FirstCall/
-- The Board of Directors of Norsk Hydro ASA today decided to
recommend to Hydro's shareholders that Hydro demerge its fertilizer
business. Upon completion of the demerger, each Hydro shareholder
will receive one share in the new publicly traded company for each
share held in Hydro. The new company's shares to be distributed to
Hydro's shareholders will constitute 80 percent of the total number
of shares outstanding upon completion of the demerger. Hydro will
hold the remaining 20 percent of the shares, which Hydro plans to
sell in an offering at the time of the demerger, subject to market
conditions. The Board also approved a plan to modernize Hydro's
visual identity, including its logo, as part of a new brand
strategy for the group. The rights to the "Viking ship" will be
transferred to Agri for use in its new logo and marketing. Agri,
which has been registered temporarily as AgriHold ASA, will change
its name prior to the demerger. The demerger is subject to approval
by an extraordinary general meeting of Hydro scheduled for January
15, 2004. The chosen transaction structure is believed to best
position Agri in the capital markets and enable the new company to
take an active part in the further development of the fertilizer
industry. The decision to establish Agri as a separate, listed
company follows a comprehensive review of Hydro's corporate
portfolio concluded in June 2003. The listing of the new Agri
company on the Oslo Stock Exchange is planned for March 25, 2004,
and the company will be headquartered in Oslo. The head of the
listed company will be Thorleif Enger, who has led Agri through its
successful turnaround. "Agri is the world's largest fertilizer
business and is well positioned for further profitable growth. As a
separate company, Agri will have direct access to the capital
markets, providing better opportunities for value creation," said
Eivind Reiten, President and CEO of Hydro. "Hydro will focus its
financial and management resources to the opportunities for further
development in the Oil & Energy and Aluminium business areas,"
Reiten said. Hydro will give its annual operational and strategic
update to the financial market on its Capital Markets Day on
December 11, 2003, where Hydro's new visual identity and logo also
will be presented for the first time. Capital Markets Days for Agri
will take place on December 3-5, 2003, in Oslo, London and New York
respectively. Hydro has considered various transaction structures
for the separation of Agri. The chosen structure of a demerger
allows for a transfer of most of Agri's value directly to Hydro's
shareholders. Hydro's offering of the remaining 20 percent of
Agri's shares will contribute to effectively position the new
company in the capital markets. Key financial figures for the first
nine months of 2003 are: * Operating revenues for Agri for the
period were NOK 27,891 million, or approximately 22 percent of
Hydro's total operating revenues. Agri's operating income was NOK
1,829 million with EBITDA of NOK 3,240 million, representing
approximately 11 percent of Hydro's total operating income and
EBITDA for the first nine months of the year. * Net income for Agri
for the first nine months of 2003 was NOK 1,265 million, which is
approximately 18 percent of Hydro's net income for the period. In
order to contribute to Agri's financial flexibility and allow for
the establishment of share-based compensation systems, Hydro's
Board has proposed that Agri's Board be authorized to issue up to
15 million new Agri Shares. A demerger agreement between Hydro and
AgriHold regulates the split of rights, assets and liabilities
between the two companies. Hydro's share capital will be split in
the ratio of 91.5 percent/8.5 percent between Hydro and Agri, based
on estimated fair market values and the proposed allocation of net
interest-bearing debt and pension liabilities. The split ratio is
based on a level of net interest-bearing debt of NOK 10.5 billion
as of October 1, 2003. As NOK 2 billion was contributed in cash by
Hydro at the formation of AgriHold, the net interest-bearing debt
for AgriHold as of the same date is NOK 8.5 billion. The current
Hydro Board of Directors will constitute the Board of Agri until
the demerger is completed. Timetable Event Demerger information
memorandum published December 1, 2003 Agri Capital Markets Days
December 3-5, 2003 Hydro Capital Markets Day December 11, 2003
Hydro extraordinary general meeting January 15, 2004 Last trading
date for Hydro Shares including AgriHold expected March 24, 2004
Separate listing of Hydro Shares and AgriHold Shares expected March
25, 2004 The AgriHold shares that Hydro intends to offer in
connection with the demerger will not be registered under the U.S.
Securities Act of 1933, as amended, and may not be sold in the
United States absent registration or an applicable exemption from
the registration requirements of the Securities Act of 1933.
Certain statements in this press release are or may constitute
"forward- looking" statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Statements that are not
in the nature of historical facts may be deemed to be
forward-looking statements and may contain identifying words such
as "believes", "anticipates", "plans", "expects" and similar
expressions. These forward looking statements are based on Hydro's
current expectations, assumptions, estimates and projections about
the company and the industries in which it engages in business. All
forward-looking statements involve risks and uncertainties. For a
detailed description of factors that could cause Hydro's actual
results to differ materially from those expressed in or implied by
such statements, please refer to its annual report on Form 20-F for
the year-ended December 31, 2002 and subsequent filings on Form 6-K
with the U.S. Securities and Exchange Commission. With respect to
each non- GAAP financial measure Hydro uses in connection with its
financial reporting and other public communications, Hydro provides
a presentation of what Hydro believes to be the most directly
comparable GAAP financial measure and a reconciliation between the
non-GAAP and GAAP measures. This information can be found in
Hydro's earnings press releases, quarterly reports and other
written communications, all of which have been posted to Hydro's
website (http://www.hydro.com/). Contact Cecilie Ditlev-Simonsen
Peik Norenberg Telephone (+47) 22 53 20 97 (+47) 22 53 34 40
Cellular (+47) 41 55 92 50 (+47) 91 76 15 56 E-mail Norsk Hydro ASA
Bygdoy alle 2 N-0240 Oslo Norway Telephone: (+47) 22 53 81 00 Fax:
(+47) 22 53 27 25 http://www.hydro.com/ DATASOURCE: Norsk Hydro ASA
CONTACT: Cecilie Ditlev-Simonsen, +47-22-53-20-97, cellular,
+47-41-55-92-50, or , or Peik Norenberg, +47-22-53-34-40, cellular,
+47-91-76-15-56, or , both of Norsk Hydro Web site:
http://www.hydro.com/
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