Swedish Orient Line focuses on Liner Operations

SWEDISH ORIENT LINE FOCUSES ON LINER OPERATIONS SOL leaving reefer shipping The downturn in the reefer market in the last two years, which is the worst ever recorded, has resulted in large losses for SOL. It will take time for the market to recover and next year is also expected to be very weak. In addition, the Board of Directors is concerned about the long-term structural changes in the reefer market and the increasing competition from refrigerated containers. In the light of this, and to be able to concentrate on its core business, SOL has decided to withdraw from reefer shipping. Accordingly, SOL has agreed to sell all its six reefers to Del Monte Fresh Produce. The selling price is in excess of SEK 260 million. The ships will begradually transferred to their new owner during the rest of this year. The sale will result in a capital loss of about SEK 140 million at the same time as the risk of losses from reefer shipping in the future will be eliminated. As reported earlier, reefer shipping losses in 1999 are expected to amount to SEK 55-60 million. As far as liquidity is concerned, the sale will have no immediate impact. It will, however, enable the good cash flow in liner operations to be used to develop this operation in the future. New liner operation partner After the sale of its reefer operation, SOL will be a dedicated liner shipping company, which will increase the potential for collaboration in the future. SOL will enter into collaboration with the European shipping group Navalmar, which is active in liner and contract shipping, mainly to and from the Mediterranean. This will secure the continued development of SOL's liner operations in a larger traffic area. Proposal for a new share issue The Board of Directors of SOL will shortly convene an extraordinary general meeting at which it will propose a SEK 50-65 million new share issue with priority for SOL's shareholders. Agreements in principle have been reached which guarantee subscription to at least 70% of the new share issue. These agreements have been reached with, among others, Navalmar and Lennart Bylock; no underwriting commissions will be paid. As regards the major shareholders, B&N Nordsjöfrakt has announced that it will refrain from subscribing to the new shares. The proposed new issue of shares will secure a capital base for SOL's liner operations. Liner operations are performing according to plan and generated a solid profit in September/October. For further information, please contact Kent Flodberg, CEO, phone +46 31 64 54 00 ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/11/19/19991119BIT00440/bit0001.doc http://www.bit.se/bitonline/1999/11/19/19991119BIT00440/bit0002.pdf