Disposal
22 Marzo 2001 - 3:29AM
UK Regulatory
RNS Number:8946A
Perstorp AB
22 March 2001
* The Board of Directors of Perstorp AB proposes that the Pergo
group be spun off to Perstorp shareholders.
* A cash dividend of SEK 2.00 (4.00) per share is proposed.
* Perstorp presents its Annual Report with pro forma accounts
for the new structure.
Dividend proposal
The Board of Directors of Perstorp AB proposes that all the shares in Pergo AB
be spun off to Perstorp AB shareholders in proportion to their holdings in
Perstorp AB and that a cash dividend of SEK 2.00 (4.00) per share be paid.
The proposal is a consequence of the company's long-term strategy and
streamlining of Perstorp as a specialty chemicals company. The Group's future
focus will be on specialty chemical products with potential for favorable
margins and high growth. Pergo, in turn, which is a typical consumer company,
will be better able to develop in its sector. At the same time, shareholders
will receive shares in two exchange-listed companies that can be valued on
their own merits. We thus expect that increased value will be created for
shareholders over the long term.
"We are now taking the last step in the streamlining program that the Board of
Directors and management have been implementing for some time. The dividend
means that both companies can focus independently on their individual core
operations, thus creating increased value for shareholders and employees,"
comments Perstorp's Chairman Urban Jansson.
"The laminate flooring market is growing rapidly and shows considerable
potential. As one of the flooring markets strongest brands, Pergo as an
independent company is more able to develop its world-leading positions," says
Pergo's Chairman Christer Gardell, President of AB Custos, which is a future
main owner of Pergo AB.
It is proposed that the spin-off will take the form of a cost-free
distribution of all the shares in Pergo AB to Perstorp shareholders pursuant
to Sweden's Lex Asea legal precedent, whereby the spin-off will be possible
without any immediate tax consequences in Sweden for Perstorp shareholders.
Perstorp has checked with the Swedish National Tax Board on the issue of the
applicability of Lex Asea.
It is proposed that each multiple of four Perstorp shares, regardless of share
series held, will carry entitlement to one Pergo AB shares; Pergo AB will have
a single series of shares. The spin-off of all of the shares in Pergo AB is
subject to the approval of Perstorp's Annual General Meeting. The proposed
record date for receipt of the Pergo shares is June 15, 2001. It is proposed
that the Pergo AB shares be registered on the Stockholm Exchange's O List
immediately following the record date. Following the spin-off, Pergo AB's
initial ownership structure will be identical to that of Perstorp in terms of
the proportion of share capital owned.
Pergo AB will be provided with initial capitalization totaling SEK 1,520
million in the form of shareholders' equity from Perstorp as of March 28,
2001, with subsequent interest-rate adjustments from January 1, 2000 to the
capitalization date. Perstorp will operate Pergo as an independent sub-group
with its own Board of Directors until the listing. As of the date of the next
quarterly report and up to the date when the spin-off has been implemented,
Perstorp's consolidated financial statements will be reported both including
and excluding Pergo AB. The table below contains a pro forma account of the
Perstorp Group's income statement excluding the Pergo group and of the
Perstorp Group on the basis of its appearance had the spin-off of Pergo
occurred at the beginning of the 2000 fiscal year.
An information brochure about Pergo will be distributed to all shareholders
prior to the Annual General Meeting and a special prospectus will be
distributed ahead of the listing on the Stockholm Exchange.
Proposed repurchase of shares
At the Annual General Meeting, the Board will also propose renewal of the
Board's authorization to make decisions regarding the repurchase of Perstorp
shares corresponding to a maximum of 10% of the shares outstanding. The
purpose is to provide the Board with an additional instrument for use - if
considered necessary - in efforts to boost shareholder value.
Any such repurchase could be effected via the stock exchange or through an
offer to shareholders. It is proposed that the Board's authorization also
include permission, within the confines of Swedish legislation and to transfer
repurchased shares.
Publication of the Annual Report
In order to hasten the availability of the Annual Report, Perstorp AB will
make the Annual Report for 2000 available on the Company's Internet website as
of March 23, 2001 and the English translation will be available as soon as
possible thereafter.
It is estimated that it will be possible to start distributing the printed
Annual Report to shareholders on April 9, 2001. A copy of the Annual Report
made available on the Company's website can also be sent to shareholders who
make such a request.
In the Annual Report, President and Chief Executive Officer Ake Fredriksson
makes the following statements, among others:
Changes in general market conditions
The overall business climate is characterized by an ever-increasing rate of
change. Due to the globalization trend, both suppliers and client companies
are growing and entire industries are being restructured. Accordingly,
uncertainty regarding the price trends for products and raw materials may be
expected to increase.
Outlook for 2001
Assuming that the Annual General Meeting votes in favor of the Board's
proposals, Perstorp will become a specialized chemical group.
With respect to 2001, we anticipate a weakening of global conditions in the
chemical market and thus lower demand. It is estimated that part of this
decline will be offset by improved margins as an effect of lower raw-material
prices. The comprehensive program that will be implemented during the year, in
order to boost the efficiency of the polyols production structure, is also
expected to make a positive contribution to full-years earnings.
Pergo is expected to show a loss during the first half of 2001, due to the
completion of the comprehensive adjustment program required for its technology
shift and to launches of new products, which are expected to start yielding
significant effects during the latter part of the year."
Pro forma accounts for the "new" Perstorp
Effects of transferred units
The table below contains a pro forma account of the Perstorp Group's income
statement down to reported operating earnings excluding the operations that
were demerged during the year and after the planned spin-off of the Pergo
group to shareholders.
A table corresponding to the Perstorp Group's pro forma balance sheet, based
on the planned spin-off of the Pergo group to shareholders, is also presented
below. The accounts below are based on the financial statements for 2000 and
assume that the Pergo group received a capital contribution of SEK 1,520
million. After the above capital contribution, the new Pergo group had total
shareholders' equity of SEK 1,689 m on a pro forma basis on December 31, 2000.
Capitalization will be effected through a new share issue and capital
contributions to the Pergo group's Parent Company. The Pergo Group will also
include Perstorp Declam AB, which will be transferred during the third quarter
of 2001. The shareholders' equity remaining in the New Perstorp will then
total SEK 2,249 million. This corresponds to an equity ratio of 62% for the
Pergo group and of 42% for the"new" Perstorp.
The balance sheet and income statement below are based on the assumption that
the capitalization of the Pergo group was effected pro forma on December 31,
2000. Intra-group transactions between the Pergo group and the "new" Perstorp
are reported pro forma in gross amounts.
Restructuring of chemical operations
As of 2001, chemical operations have been reorganized in order to increase the
focus on highly specialized products. Chemical operations are now organized in
four subgroups, each representing a specialized product area: Perstorp
Specialty Chemicals, Perstorp Formox, Perstorp Chemitec and Perstorp
Composites. The tables below contain a pro forma account of the new Perstorp
Group's income statement plus net sales by division. The new streamlined
Perstorp Group will have annual sales of SEK 5,286 m.
Net sales - Pro Forma
SEK m 2000 1999
Perstorp Specialty Chemicals 3,048 2,478
Perstorp Formox 745 394
Perstorp Chemitec 1,576 1,302
Perstorp Composites 344 307
Eliminations -429 -273
Total "new" Perstorp 5,284 4,208
Pergo Group 3,714 3,635
Eliminations -179 -183
Net sales excluding demerged business units 8,819 7,660
Demerged business units including 410 2,692
eliminations
Group 9,229 10,352
Consolidated income statement - Pro Forma
SEK m Total Demerged BU:s incl Pergo Adjustment "New"
elim
Group Group intragroup Perstorp
items
Net sales 9,229 410 3,714 -179 5,284
Cost of goods sold -7,080 -319 -2,670 180 -4,271
Gross earnings 2,149 91 1,044 1 1,013
Sales-, adm- and R&D -1,632 -92 -920 - -620
costs
Items affecting -190 - -295 - 105
comparability
Other operating revenues 76 2 12 - 62
and expenses
Results from 8 - 1 - 7
participations in
associated companies
Operating earnings 411 1 -158 1 567
Consolidated balance sheet - Pro Forma
SEK m Total Group Pergo Elimination, "New"
Group intragroup Perstorp
item
Long-term operating assets 3,780 830 - 2,950
Long-term financial assets 517 184 - 333
Inventories 1,110 446 - 664
Current operating receivables 2,427 1,136 47 1,338
Current financial assets 92 139 138 91
Total assets 7,926 2,735 185 5,376
Shareholder's equity 3,938 1,689 - 2,249
Minority interest 42 3 - 39
Provisions 454 71 - 383
Long-term financial liabilities 58 - - 58
Current operating liabilities 1,802 593 47 1,256
Current financial liabilities 1,632 379 138 1,391
Total liabilities and 7,926 2,735 185 5,376
shareholder's equity
Net debt 1,509 240 1,269
March 22, 2001
Perstorp AB
Board of Directors
For further information please contact Corporate Communications (Tel: +46
435382 62))
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