KLIPPAN AB – Settlement Proposal

SETTLEMENT PROPOSAL FOR KLIPPAN AB The following settlement proposal has been approved by KLIPPAN AB’s largest creditors, among them, the Södra Group. 1. KLIPPAN AB makes as full payment 37% of the capital sum of the accounts payable covered by the settlement. Interest on the capital sum is not paid. 2. Disbursement of 25% of the capital sum will be made on 31 July 2006, provided that the settlement has been accepted. 3. Disbursement of the outstanding 12% of the capital sum will be made on 31 July 2007, provided that the settlement has been accepted. 4. No security is provided for the settlement. 5. Payments will be made to the bank or PlusGiro accounts specified by the creditors. SETTLEMENT PROPOSAL FOR KLIPPAN MÖLNDAL AB The following settlement proposal has been approved by Klippan Mölndal AB’s largest creditors, among them, the Södra Group. 1. Klippan Mölndal AB makes as full payment 37% of the capital sum of the accounts payable covered by the settlement. Interest on the capital sum is not paid. 2. Disbursement of 25% of the capital sum will be made on 31 July 2006, provided that the settlement has been accepted. 3. Disbursement of the outstanding 12% of the capital sum will be made on 31 July 2007, provided that the settlement has been accepted. 4. No security is provided for the settlement. 5. Payments will be made to the bank or PlusGiro accounts specified by the creditors. Comments on the settlement proposal The settlement proposal and financial information will be made available to the creditors at the earliest possible convenience. To the settlement proposal and financial information sent to the creditors will be appended a proxy enabling the reconstructor to vote for the settlement. Those who accept the settlement are requested to complete the proxy document and forward it to the reconstructor; this will thereby allow them to participate in the vote without having to be present at the district court proceedings. As soon as 40% of the creditors have given notification of their acceptance of the settlement, in accordance with the above, the request for composition proceedings will be submitted to the court. The Board of Directors KLIPPAN AB and Klippan Mölndal AB For further information, please contact: Thomas Billing, MD and CEO tel: +46 (0)435-291 01 and Guy Lofalk, Attorney tel: +46 (0)8-22 09 00.