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    Kvaerner concludes agreement on refinancing

    News // October 4, 2001
    Kvaerner, the Anglo-Norwegian engineering and construction Group, says that following its statement on 19 September, it has reached agreement with its main banks on how to structure the short-term and long-term financing of the Group. In the negotiationswith the banks, the provision of short-term liquidity has received first priority.

    The term of a NOK 800 million short-term loan has been extended to 31 December 2001. This loan was granted on 19 September 2001.

    The banks will work to replace Kvaerner's existing short-term loan facilities with a three-year loan, which is to be repaid at the end of the term.

    The banks presume that a Rights Issue will be undertaken, securing proceeds of at least NOK 1 billion. The Board intends, however, to implement an Issue of NOK 2 billion, based on preferential rights for existing shareholders.

    Given the uncertainty attached to the Kvaerner share lately, and a desire to reduce risk for the new capital, the Board will work to arrange the Rights Issue as three-year convertible bond, either in whole or in part.

    Based on the agreement reached with the Group's banks, efforts will now be intensified to establish an underwriting syndicate for the Rights Issue.

    So far, DnB, Folketrygdfondet, Siem Industries, and others have agreed to participate in the syndicate, subject to a satisfactory refinancing of the Group's US$ 450 million loan facility and a full underwriting of the Rights Issue of NOK 1 billion. The total amount underwritten so far is NOK 500 million. The terms and conditions of the Rights Issue will be determined in due course. The Rights Offering is expected to be completed by the end of November.

    There has been an ongoing dialogue with the major shareholders of the Group, and this dialogue is expected to continue.

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