15IO Euro.bk. 36

RNS Number:8494N
Kvaerner PLC
28 November 2001




Aker Maritime and Kvaerner reach agreement on a solution (update)

LONDON, 28 NOVEMBER 2001: Kvaerner, the international engineering and
construction Group, 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 14 December. 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 19 December, 2001.  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 5 December.  The presentation about today's
announcement can be see at: 

http://www.kvaerner.com/group/investor_relations/presentations/a_strong_kvaern
er/strong.ppt 


For more information: 

Paul Emberley, Vice President Group Communications: +44 (0)20 7339 1035 or 
+44 (0)7768 813090 or paul.emberley@kvaerner.com or Geir Arne Drangeid,
Director, Corporate Communications, Aker Maritime: +47 913 10 458

Notes to editors:

Kvaerner is a world-class Anglo-Norwegian engineering and construction Group. 
It meets the needs of its customers by adding value to their business -
through the provision of innovative, cost-effective solutions - for challenges
in the hydrocarbons, process and metals industries.  The Group's activities
are currently organised in two core business areas: E&C (Engineering and
Construction), and Oil & Gas. Other activities currently also include
shipbuilding and pulping equipment. The Group has annual revenues in excess of
US$6 billion, with some 34,000 permanent staff located in some 35 countries
throughout Europe, Africa, Asia and the Americas.

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