TOMRA and Wise Recycling
WMG (the principal customer for TOMRAs and WRs aluminum containers) suffered substantial losses in their aluminum recycling mill in Alabama during 2000, and a refinancing of WMG was necessary in order to make the transaction possible. A refinancing plan has been worked on during second half 2000 and proved to be more complicated than originally expected. WMGs banks agreed on a waiver of WMGs loan convenants in order to secure continued operations throughout the year, while simultaneously tightening the credit terms of the company.
On December 28, 2000, TOMRA and WMG owners signed the final purchase agreement according to the terms in the original Letter of Intent. Due to the difficult financial position in WMG, TOMRA agreed to take a secured note on the USD 12 million purchase price together with a note of USD 15 million on receivables from WR.
The WMG bank group concluded Friday 26 January 2001, after discussing the terms in these agreements in their Steering Committee, not to accept the notes. TOMRA has decided to take immediate steps to reduce the financial exposure against WMG.
The audit of the financial statements of WMG and WR will start this week. The WMGs bank waiver will expire February 28, 2001 if not extended. TOMRA will have to assess the necessity and the size of any write-off before the WMG audit and financing plan is concluded. TOMRAs total exposure against WMG, including WR, is USD 45 million.
TOMRAs board expects that the crises in WMG will have a significant impact on 2000 earnings. The board does not expect that the development in WMG will have any negative impact on 2001 earnings and liquidity. TOMRAs equity ratio and liquidity situation remains strong.
Asker, 29 January 2001
TOMRA SYSTEMS ASA
President & CEO
Questions can be directed to President/CEO Erik Thorsen <BR>at telephone +47 66 79 92 01 <BR>or + 47 66 79 91 00. <BR>