Transaction of the shares of Karkkilan Keskustakiinteistöt Oy
Componenta Corporation Stock Exchange Release 24.10.2005
Transaction of the shares of Karkkilan Keskustakiinteistöt Oy According to a press release issued by the European Commission on 24 October 2005, the Commission finds that the agreement in December 2003 between the city of Karkkila and Componenta Corporation concerning the acquisition of shares of a real estate company infringes the provisions on state aid in the EC Treaty. According to the Commission's press release, the Commission has decided to order the State of Finland to recover the purchase price of EUR 2.4 million from Componenta Corporation, which Componenta Corporation received from the city of Karkkila in December 2003 when Componenta Corporation sold its shares in the real estate company to the City of Karkkila. The European Commission has not given notice of the said decision to Componenta Corporation. Componenta Corporation is not aware that the State of Finland would have initiated any recovery proceedings against Componenta Corporation on the basis of the decision by the European Commission. The State of Finland has previously provided the European Commission with a submission in the matter, according to which the share purchase between Componenta Corporation and the City of Karkkila was concluded at market price, and that according to the submission of the State of Finland the transaction did not contain any other state aid either. The State of Finland has the opportunity to bring the recovery decision of the Commission before the European Court of Justice. Componenta decided in October 2003 to close down the foundry in Alvesta, Sweden and transfer its machinery to the foundry in Karkkila. In December 2003 Componenta sold its 50% holding in the real estate company Karkkilan Keskustakiinteistöt Oy to the city of Karkkila. The selling price was EUR 2.4 million. The company Karkkilan Keskustakiinteistöt Oy at the time of the transaction had no external debt and owned some 75 hectares of land in Karkkila (including 150 plots of land for private homes and plots for apartment blocks and terraced housing in the center of Karkkila, which had a combined total permitted building volume of 68,000 m2, and unplanned land). In setting the price for the land, the company applied prices confirmed by the city council of Karkkila in the autumn 2003. At a later date the city of Karkkila terminated Karkkilan Keskustakiinteistöt Oy in accordance with normal practice, by liquidation of the company. Helsinki, 24 October 2005 COMPONENTA CORPORATION Heikki Lehtonen President and CEO Further information: Heikki Lehtonen Kimmo Virtanen President and CEO CFO tel. +358 10 403 00 tel +358 10 403 00