Polish associated company declared bankrupt

PRInz, a Polish construction company in which NCC owns a 47-percent interest, has been declared bankrupt, following a period of liquidity problems. NCC had already posted an impairment loss for the value of its shareholding in PRInz, which had a negative effect of SEK 26 million on third-quarter earnings.

The construction company PRInz had sales of approximately PLN 600 million, corresponding to about SEK 1.4 billion. NCC acquired 25 percent of PRInz in December 1999 and subsequently increased its holding to 47 percent. The other major shareholders in PRInz are the Polish company Mostostal Zabrze-Holding S.A., which holds 33 percent, and the Polish bank BGZ, which holds 19 percent. During recent years, NCC has worked to change PRInz’s ownership structure, against the background of NCC’s strategy of streamlining its operations and focusing them on construction operations in the Nordic market. During the summer of 2005, NCC conducted an intensive sales process aimed at selling the shares in PRInz. Such a transaction required a private placement and, accordingly, an Extraordinary General Meeting was held in August to vote on a share issue. However, the other shareholders rejected this proposal, despite knowing that PRInz’s ability to manage its financing without additional capital contributions was limited. During the autumn, NCC worked to bring about a reconstruction of PRInz, but failed to reach agreement with the other shareholders. Recently, the company was placed in receivership, in order to protect the interests of the company’s creditors, but bankruptcy finally became inevitable. It its closing accounts for the third quarter, which were finalized on October 28, NCC posted an impairment loss for the value of its shareholding in PRInz, which had a negative effect of SEK 26 million on earnings. The remaining value of NCC’s shareholding in PRInz on September 30 was SEK 33 million, which is that portion of the company’s shareholders’ equity that NCC currently believes it will be able to recover. For further information, please contact: Annica Gerentz, Senior Vice President Corporate Communications, NCC AB, +46 8 5855 2204, +46 70 398 42 09 Greeg Nordqvist, Board Member, PRInz, +46 8 5855 2059, +46 70 553 04 26