The Norwegian Financial Supervisory Authority (Nw. Finanstilsynet) has informed Kvaerner that its prospectus supplement dated 4 July 2011 – containing supplemental information relating to the Longview project and resolutions of the Board of Directors of Aker Solutions and Kvaerner – has been approved.
Update on the Longview
Kvaerner has been informed that Longview Power LLC (Longview), the owner of the Longview project, has issued a demand for payment under a letter of credit supplied by Kvaerner for the project, while Kvaerner North American Construction Inc. (a subsidiary of Kvaerner following consummation of the demerger of Aker Solutions) has initiated arbitration against both Longview and Foster Wheeler North America Corp., the supplier of the boiler for the Longview project. Kvaerner North American Construction Inc. experienced an increase in the cost of construction of the project from a number of causes, including force majeure events, changes to the project, and third party actions in furnishing engineering services, equipment and materials, all of which have directly and adversely impacted North American Construction Inc.’s project work. The arbitration is intended to recover excess construction costs and other damages incurred by Kvaerner North American Construction Inc. in execution of the project.
As a result of the recent developments in respect of the Longview project and the strained commercial relation between the various parties to the project, Kvaerner has decided to make a further loss provision of U.S. dollar 50 million in respect of the project in the second quarter of 2011. This is not a profit warning. Other parts of the Kvaerner Group are expected to deliver strong operational results in the second quarter of 2011.
By making a further provision of U.S. dollar 50 million in the second quarter of 2011 in respect of the project, the risk for further losses resulting from the final settlement of the project accounts is reduced. However, there are still substantial uncertainties with respect to the final financial outcome of the project.
For further information on the Longview project, please refer to Kvaerner’s listing prospectus dated 15 June 2011, as supplemented by the prospectus supplement dated 4 July 2011.
Conditions to Consummation
of the Demerger:
The Boards of Directors of Aker Solutions and Kvaerner have considered the fulfillment of the conditions to consummation of the demerger of Aker Solutions as set out in the demerger plan. All the conditions were found to have been fulfilled with except to expiry of the creditor notice period applicable to the Demerger which, bearing unforeseen circumstances, will expire on 6 July 2011. For information concerning certain post-closing measures to be undertaken, please refer to the prospectus supplement dated 4 July 2011.
As of the date hereof there are no changes to the previously communicated indicative timetable for the consummation of the demerger and the listing of the shares of Kvaerner on the Oslo Stock Exchange (Nw. Oslo Børs).
Availability of Documents:
The listing prospectus of Kvaerner, together with prospectus supplements, is available at the following internet pages: www.kvaerner.com; www.dnbnor.no; www.nordea.no and www.sebenskilda.no. Hard copies of the prospectus, together with the prospectus supplement, may be obtained by contacting Kvaerner (+ 47 21 08 90 00), DnB NOR Markets (+47 22 94 88 80), Nordea Markets (+47 22 48 50 00) or SEB Enskilda (+ 47 21 00 85 00).
For further information, please contact:
Ingrid Aarsnes, SVP Investor Relations, Kvaerner, Tel: +47 67 59 50 46, Mob: +47 950 38 364
Mariken Holter, SVP Corporate Communications, Kvaerner, Tel: +47 67 52 74 35, Mob: +47 91 78 73 58
With more than 3 500 HSE-focused and experienced employees, Kvaerner is a specialised provider of engineering, procurement and construction (EPC) services for offshore platforms and onshore plants. Kvaerner, through its subsidiaries and affiliates, is an international contractor that plans and realises some of the world’s most demanding projects as a preferred partner for upstream and downstream oil and gas operators, industrial companies and other engineering and fabrication contractors.
In 2010, the Kvaerner group had aggregated annual revenues of more than NOK 13.3 billion and the company had an order backlog per 1 April 2011 of more than NOK 15.6 billion. Kvaerner aims to be publicly listed at the Oslo Stock Exchange in July 2011. Until this process is completed, Kvaerner is owned 100 percent by Aker Solutions ASA. For further information, please see www.kvaerner.com and www.akersolutions.com.
Cautionary Note Regarding Forward-Looking Statements:
This release includes forward-looking statements that reflect Kvaerner’s current views with respect to future events and financial and operational performance. Readers are cautioned that forward-looking statements are not guarantees of future performance and that the Kvaerner group’s actual financial position, operating results, liquidity, business and the development of the industry in which the Kvaerner group operates may differ materially from those contained in or suggested by the forward-looking statements contained herein. Kvaerner cannot guarantee that the intentions, beliefs or current expectations upon which its forward-looking statements are based will occur.
This information is subject of the disclosure requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act.