According to the agreement Kvaerner Masa-Yards and its future shipbuilding projects will be granted guarantees and bonding lines by Finnvera at commercial terms sufficient to meet the needs of foreseeable business volume of Kvaerner Masa-Yards during the coming years. Kvaerner Masa-Yards will of course continue to seek financing from other sources. The agreement expires at the end of 2010.
"Historically the Shipbuilding activities of Aker Kvaerner have required a disproportionate share of the group's financial capacity. The agreement with Finnvera will allow Aker Kvaerner to redirect a substantial part of its financial resources to further strengthen our other core businesses.
Within 12 to 18 months we expect to be able to reallocate in the range of EUR 250-300 million, half of which is already in the group cash pool," said Helge Lund, Group President and CEO of Aker Kvaerner. EUR 300 million represents in excess of NOK 50 per Aker Kvaerner share.
"The additional financial flexibility puts us in a position where we can cancel out the three-year debt that expires at the end of 2004," he said. Aker Kvaerner will retain its ownership in Kvaerner Masa-Yards. The group will continue to have above EUR 200 million in equity in the Finnish shipbuilders, an investment that is expected to generate reasonable rate of return going forward.
Kvaerner Masa-Yards ranks as a leading cruise ship builder of the world, with a remarkable track record and recognition both with regard to the quality of the design and concepts, project execution capabilities and safety. The agreement with Finnvera will provide a fully competitive financial framework for Kvaerner Masa-Yards going forward.
"Employees and management of Kvaerner Masa-Yards have achieved significant operational improvements at the yards in Helsinki and Turku. The yards are cost effective and quality driven, and have produced very positive results in the past few years," said Mr Lund.
Jorma Eloranta, President and CEO of Kvaerner Masa-Yards added: "The overall market situation is difficult, but we are working hard to win new work. I am confident that we will continue to be an even stronger core player in the Finnish shipbuilding cluster going forward."
END
For more information:
Media: Senior Vice President, Group Communications, Aker Kvaerner, Geir Arne Drangeid, +47 91 31 04 58
Investors: Vice President, Investor Relations, Aker Kvaerner, Tore Langballe, +47 90 77 78 41
More information:
Aker Kvaerner is a leading global provider of engineering and construction services, technology products and integrated solutions. Group activities span a number of industries, including Oil and Gas upstream and downstream, Process, Pharmaceuticals, Metals, Power, Chemical Pulping, Environmental and Shipbuilding. Aker Kvaerner is a multi-local group of businesses with nearly USD 6 billion of annual revenues and around 33 000 employees in more than 30 countries.