Hafslund Nycomed and Oslo Energi<br>enter into strategic cooperation
Date:Fri, 10.May 1996 From:HafslundNycomed
Hafslund Nycomed (NYSE:HN) and the municipal utility company, Oslo Energi, have agreed to consolidate their interests in the jointly-owned Kykkelsrud/Fossumfoss (FKF) Power Plant. Hafslund Nycomed currently owns approximately 72% and Oslo Energi approximately 28% of this hydropower facility on Norway?s Glomma river.
In connection with Hafslund Nycomed?s planned demerger of its pharmaceutical business, the managements of the two companies have entered into an agreement whereby Oslo Energi will transfer the ownership of its share of FKF to Hafslund ASA, after the demerger of the pharmaceutical operations has been implemented. As payment for its share of FKF, Oslo Energi will receive 11.25% of the total share capital, post demerger, of Hafslund ASA. In addition, Oslo Energi will pay Hafslund ASA the sum of NOK 10 million in cash for the resolution of conflicts regarding FKF. The agreement has been negotiated by the two companies? Chief Executive Officers and requires the approval of the Board of Director and the General Meeting of both companies.
This agreement for assuming sole ownership of the FKF power plant is the result of Hafslund Nycomed?s express intent to make Hafslund ASA a leading publicly-listed energy company, among other things by increasing the volume of its electricity production. Hafslund Nycomed?s current annual production is 2600 Gwh, and the agreement will increase the production of Hafslund ASA by 319 Gwh, or 12.3%, a year. The agreement is conditional on the waiver by the Norwegian Ministry of Industry of concession and preemtive rights, and on tax exemption for the transaction by the Norwegian Ministry of Finance.
If this agreement provides the expected positive synergies, the two companies will look favorably upon a further development of their cooperation in several areas.
Oslo, Norway, May 9, 1996