Ratos: Refinancing of Hägglunds Drives releases SEK 1 billion

Ratos: Refinancing of Hägglunds Drives releases SEK 1 billionRatos has decided to carry out a refinancing of Hägglunds Drives. This refinancing has been made possible by highly successful development in recent years and positive prospects for the years ahead. Hägglunds Drives, which is owned 100% by Ratos, develops, manufactures and sells hydraulic drive systems and motors. The company's customer base includes the mining and materials handling, marine and offshore, pulp and paper, and sugar industries. During the past five years the company's sales have increased by approximately 11% per year and are expected to reach SEK 1.5 billion (1.2) in 2006. In 2006, the number of employees has risen 14% to almost 650. The majority of employees work at Hägglunds Drives' production facility in Mellansel in Sweden's Norrland region. More than 90% of Hägglunds Drives' sales go to export. The company was awarded the prestigious "Export Hermes 2006" prize in the autumn. Ratos CEO Arne Karlsson comments: "Hägglunds Drives has several good years behind it. We expect that this trend to continue. Together with the company's board and management, we have analysed Hägglunds Drives' future capital requirements. The structure we are now creating will meet the company's requirements for capital for investments and continued growth. At the same time, Ratos will release resources for new investments." Factors behind Hägglunds Drives' strong growth include China's substantial investment needs, the strong rise in demand for ethanol which in turn favours the sugar industry and the ongoing investments in the offshore industry. Products from Hägglunds Drives meet demands for high torque, robustness and variable speed that are used on drive systems for materials handling equipment and conveyors. Hägglunds Drives CEO Per Nordgren comments: "Naturally we are very pleased with development in recent years. I am particularly proud of how well we stand up to international competition. I can now see continued favourable growth in Asia, South America and North America. We are therefore continuing to recruit qualified employees for our operations in Mellansel and all our sales companies where we are represented in some 20 countries." Hägglunds Drives' 2005 sales amounted to SEK 1,175m and are expected to reach SEK 1.5 billion this year. Profit (EBITA) in 2005 was SEK 175m and SEK 127m (53) in the first half of 2006. Following the refinancing, the group's net debt will amount to approximately SEK1.2 billion. For Ratos the refinancing will not affect earnings. The consolidated book value of Hägglunds Drives, on the other hand, will be adjusted downwards by an amount corresponding to the distribution. The book value will thus be negative and amount to approximately SEK -600m (based on Ratos's most recent interim report). For further information, please contact:Arne Karlsson, CEO Ratos, +46 8 700 17 00Anna-Karin Celsing, Head of Corporate CommunicationsRatos, +46 70 399 62 39Per Nordgren, CEO Hägglunds Drives, +46 70 398 16 06 Financial calendar from Ratos: Interim report January-September 2006 10 November 2006Year-end report 200622 February 2007Annual General Meeting11 April 2007 Ratos is a listed private equity company. The business concept is to maximise shareholder value over time by investing in, developing and divesting primarily unlisted companies. Ratos thus offers stock market players a unique investment opportunity. The equity of Ratos's investments is approximately SEK 9 billion. Ratos's holdings include Alimak Hek, Arcus, Anticimex, Bisnode, Bluegarden, Camfil, DIAB, GS-Hydro, Haendig, Haglöfs, HL Display, Hägglunds Drives, Inwido, Jøtul, Lindab, Superfos and Other holdings.Attachment: Press release (PDF)Text version / Internet version / Print / Close