KVR Kvaerner Asa

RNS Number:2443K
Kvaerner ASA
19 September 2001


Kvaerner proposes NOK 1.5-2 billion equity issue as part of required new
financing;  changes in Board and management

LONDON, 19 SEPTEMBER 2001: The Board of Kvaerner ASA, the Anglo-Norwegian
engineering and construction Group, today announced that it has decided to
recommend an equity issue of between NOK 1.5 billion and NOK 2 billion.  The
decision of the Board has been taken following consultation with the Company's
largest shareholders and principal lenders.  The terms and conditions for the
issue will be determined by the Board in due course.  A proposal will be
presented to shareholders at an Extraordinary General Meeting planned to be
held by the end of October.

The need for the proposed equity issue is rooted in the requirement to secure
necessary short-term liquidity for the Group - and to secure the basis for
long-term financing arrangements. The issue is also intended to facilitate a
possible split of the Group into two separately listed companies, one for the
core businesses of E&C and Oil & Gas, and one for the remaining activities of
the Group.   Despite the fact that the Group's solidity is satisfactory, it
has been necessary to secure new short-term liquidity through credit
facilities of NOK 900 million.  Both the Group's major banks and its largest
shareholders - Aker Maritime ASA and Folketrygdfondet - have contributed in
the provision of necessary short-term liquidity.  The proposed equity issue is
an important element in the ongoing process to create improved long-term
financing for the Group.

Kvaerner said in its interim financial statement that working capital is
expected to increase again in the second half of the year, due to a
deterioration in E&C, a number of problem projects in that business, and
generally weaker market forecasts in the metals segment of E&C.  The events of
last week in the United States of America will contribute to greater
uncertainty, and in the present environment it has proven difficult to finance
the increased working capital through the normal financing arrangements
provided by the banks - without an equity issue being launched simultaneously.

Negotiations with the Group's lending banks to secure long-term financing will
take place prior to publication of the equity issue prospectus.  Constructive
discussions with the Group's largest shareholders are taking place. 

Board and Management:  In order to sustain a position within the Company where
all shareholder interests are appropriately represented, the Board has asked
the election committee to consider changes to the Board of Directors.  A
proposal will be presented to an Extraordinary General Meeting in the near
future. To further strengthen the positive climate of co-operation between the
shareholder groups, it has been mutually agreed that Kjell E Almskog,
President & CEO of the Group will step down from his position by the end of 
the year when it is anticipated his successor will have been appointed.  



For more information:   Trond Andresen, Senior Vice President, Group
Communications: +44 (0)7770 856550 or Paul Emberley, Vice President Group
Communications: +44 (0)20 7339 1035 or  +44 (0)7768 813090.                   

Notes to editors: 
A combined conference for media and analysts will take place later today at
2pm (London time)/ 9am (EST) at the London headquarters of Kvaerner, 68
Hammersmith Road, London W14.  Harald Arnkvaern (Chairman) and Kjell E Almskog
(President & CEO) will make brief statements and answer questions via live
video link from Oslo.  Outside of London, participants may also dial-in,
listen and take part in the conference live by calling +44 (0)20 8401 1043
quoting "Kvaerner".  In North America, at 9am (EST), participants may call  +1
800 553 3594 quoting "Kvaerner".  An instant replay will also be available for
a period of five working days after the conference by calling (UK) +44 (0)20
8288 4459 (access code: 623212) or in the USA, call +1 800 625 5288 (access
code: 1232222). 

Kvaerner is a world-class Anglo-Norwegian engineering and construction group.
The Group's activities are organised in two core business areas: E&C
(engineering and construction), and Oil & Gas.  It also has interests in
shipbuilding and the provision of services to the pulping industry.  Kvaerner
is a Norwegian registered business, but has a London, UK-based international
headquarters.  The Group has annual revenues of more than US$6 billion, with
some 35,000 permanent 

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