Elcoteq SE has signed a Letter of Intent with Chinese industrial
investor, Kaifa, on equity investme
Elcoteq SE has signed a Letter of Intent with Chinese industrial investor, Kaifa, on equity investment of 50 MEUR and plans to restructure debt
(Thomson Reuters ONE) - ElcoteqSEStock Exchange ReleaseJuly 22, 2009, at 8.45 am (EET)Elcoteq has signed a conditional Letter of Intent with Chinesetechnology company Shenzhen Kaifa Technology, a separately listedcompany of China Electronics Corporation (CEC) Group, concerning anequity investment of 50 MEUR. CEC has been Elcoteq's successful jointventure partner in China since 2002. The intended transactiontogether with the required debt restructuring would significantlystrengthen Elcoteq's financial situation, increase company'sfinancial capability to manage existing and new customer projects,and hence ensure Elcoteq's turnaround back to growth and profits.Elcoteq and Shenzhen Kaifa Technology Company Limited ("Kaifa") havesigned a Letter of Intent concerning a major equity investment. Kaifabelongs to the CEC Group of technology companies. The CEC Groupconsists of more than 200 different technology companies; fromsemiconductor, computer and mechanics companies to softwaredevelopment.As an equity investment Kaifa would subscribe new shares to be issuedby Elcoteq with the amount of 50 MEUR. Elcoteq and Kaifa are alsonegotiating about further financing, which is subject to certainfinancial performance criteria.Kaifa's investment is depending on Elcoteq's creditors agreeing onrestructuring of current debt, which will include partialdebt-to-equity swap and it needs shareholders' approvals. The actualnumber of shares to be issued to Kaifa will be determined after thenegotiations with the creditors have been completed, aiming at Kaifabecoming the biggest single shareholder of Elcoteq with a minimumownership of 30%. The definitive agreement is planned to be signedduring the third quarter of 2009.Pohjola Corporate Finance has been engaged to advice the company inthese debt negotiations."This transaction gives us the strengthened financial basis forfuture growth. It also makes perfect business sense by providing uswith a very influential partner in China - Kaifa being part of theCEC Group. Hence this co-operation creates a very solid platform fordeveloping our service offering into various new areas", says Mr.Jouni Hartikainen, President and CEO of Elcoteq. "Elcoteq brings us aglobal manufacturing network which helps us to serve our Asian andother customers wishing to expand their operations worldwide, so itis a logical step in our strategy", says Mr. Tam Man Chi, Chairman ofthe Board and President of Kaifa.About KaifaKaifa was established in 1985 and is publicly listed in ShenzhenStock Exchange (Stock Code 000021SZ). It employs approximately 7,400persons. The Group's principal activities are developing,manufacturing and selling computer and electronic communicationproducts with annual net sales of approximately 1.44 billion euros(2008). Major products include magnetic head of computer discdrivers, hard disk plates, computer hardware and software systems andequipment, communications equipment, electrical apparatus and spareparts, household computers and video games. Kaifa's products are soldin the People's Republic of China but majority are exported to otherAsia Pacific countries and America. Kaifa's branches and R&D teamscover sites in Hong Kong, Singapore and USA. For more information,please visit www.kaifa.com.cn and www.cec.com.cn.ELCOTEQ SEMinna AilaDirector, Investor Relations and Corporate ResponsibilityFurther information:Jouni Hartikainen, President and CEO, +358 10 413 11Mikko Puolakka, CFO, tel. +358 10 413 1287Minna Aila, Director, Investor Relations and CorporateResponsibility, tel. +358 10 413 1908About ElcoteqElcoteq SE is a leading electronics manufacturing services (EMS)company in the communications technology field. Elcoteq's globalservice offering covers the entire lifecycle of products, fromproduct development to after market services. By further combiningmechanics expertise into its service offering, Elcoteq's vision is tobe a leading integrated electronics manufacturing services (IEMS)company.Elcoteq provides global end-to-end solutions consisting of productdevelopment services, supply chain management, NPI, manufacturing,and after market services for the whole lifecycle of its customers'products. These products include Personal Communications productssuch as mobile phones and their parts, Home Communications productssuch as set-top boxes and flat panel TVs as well as CommunicationsNetworks products such as base-stations, tower-top amplifiers, andmicrowave systems.Elcoteq's consolidated net sales for 2008 totaled 3.4 billion euros.Elcoteq SE is listed on the Nasdaq OMX Helsinki Ltd. For moreinformation visit the Elcoteq website at www.elcoteq.com.This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
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Datum: 22.07.2009 - 07:46 Uhr
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