Vattenfall and Arrowhead form new infocom company

Vattenfall and Arrowhead form new infocom company PRESS CONFERENCE at Strand hotel in Stockholm, at 2.30 p.m., May 23, 2000 Vattenfall, the leading Nordic energy company, and Arrowhead are forming a new infocom company. Arrowhead's existing operations will be merged with the user rights of Vattenfall's investment in 7,000 kilometres of fibre network. The newly formed company will become a leading IP-carrier and supplier of infocom services (broadband access, telephony, internet, intelligent home services, entertainment/media). The "new" Arrowhead will at the same time become Vattenfall's main supplier of infocom services. The "new" Arrowhead will initially be half-owned by Vattenfall. Other owners are the current shareholders of Arrowhead and Figuration. The company will during the summer/autumn perform a private placement and the aim is to become listed on the stock exchange when the market situation is suitable. By 2002, the "new" Arrowhead plans to have access to 15,000 kilometres of broadband networks. The network in Sweden will be completed in stages during the next two years and networks will be developed or acquired in Denmark, Germany, Poland, the Baltic states, and Finland. The entire "Hansa ring" around the Baltic sea will be completed during 2002. The "new" Arrowhead estimates a turnover of SEK 3 billion by 2002. Vattenfall has previously decided to invest in broadband networks comprising 7 000 kilometres. Today, Vattenfall participates in the development of the fibre optic triangle connecting Stockholm, Göteborg and Malmö and connects Stockholm and Luleå in partnership with Svenska Kraftnät. Regional and local networks will now be tied to the national network as a result of the investment in optic fibre cables and to these cables' connection to existing power lines. - Arrowhead, together with Figuration, its new subsidiary, offers several advantages as a strategic partner, particularly as we planned our broadband investment. The company has high technological expertise, a well-developed range of infocom services, and an existing organisation with immediate implementation force. The cooperation gives an opportunity to provide our base of some three million customers with competitive offers in the field of infocom, says Bertil Tiusanen, interim chief executive of Vattenfall. - This decision provides us with a swiftness in the marketplace that would otherwise have been difficult to achieve on our own. In this way, Vattenfall can immediately obtain value from product development and quickly gain return on investments in optic fibre networks, continues Bertil Tiusanen. - By having access to Vattenfall's fibre networks, sales channels and customer base, the "new" Arrowhead can gain sufficient scale, effective sales and a rapid establishment. At the same time, the "new" Arrowhead will have strategic relations with other companies, says Sune Lundin, chief executive of Arrowhead. The company is today an established strategic partner of Sensel, Vattenfall's venture in the field of intelligent home services. - Arrowhead/Figuration sees the opportunity to co-operate with Vattenfall as an excellent means of continued expansion. With Vattenfall's optic fibre cables, the "new" Arrowhead will become an exciting player on the IP-carrier market and can create highly effective networks, says Roland Undhagen, chief executive of Figuration AB. The implementation of the business deal: The new company is formed by Arrowhead carrying out a directed share issue to Vattenfall corresponding to 50% of the value of the company, and by Vattenfall contributing the user rights of the existing Vattenfall fibre optic network and 50% of Vattenfall's decided investment in new fibre optic cables. The new company will also retain the right to first refusal to the remaining part of this investment. Moreover, Arrowhead will be Vattenfall's main supplier of infocom services and broadband capacity. Arrowhead in its current form, with an expected turnover of some SEK 280 million in 2000, 350 employees, and operations within broadband access and internet related services, will become fully integrated in the new company. As part of the transaction , Figuration AB will be merged with Arrowhead. Figuration is an IP-carrier with a extensive knowledge in the area of broadband network construction and operations, with an expected turnover of some SEK 75 million in 2000, and 25 employees. This deal is conditional upon approval by the Arrowhead shareholders' general meeting on June 26, this year. During the interim, the details of the merger will be finalized. A directed share issue is planned for one or more external investors during this summer/autumn. An IPO will subsequently take place when market conditions permit. Issued by Vattenfall's Press Office, telephone +46 8 739 50 10. For further information contact: Jan C Johansson, business area director Vattenfall +46 8-739 7049, 070-5550202 Bertil Tiusanen, interim CEO, Vattenfall +46 8-7395008 Sune Lundin, chief executive of Arrowhead, +46 8-723 3903, 070-6 22 70 77 Mats Lundquist, deputy chief executive of Arrowhead, 070-513 3460 Vattenfall is one of the largest energy companies in Europe, accounting for 25 percent of total electricity sales in the Nordic region. The total electricity generation is 85 TWh. Vattenfall is a leading operator of regional and local distribution networks serving 1,1 millions customers. The Group also conducts operations in the areas of heating and natural gas, as well as transmission services and consulting for the energy sector. Vattenfall's biggest customers are energy companies, industrial enterprises, and retail customers in the Nordic region. Vattenfall is also active in the Baltic countries, Germany, the Netherlands, Poland, the Czech Republic, Austria, Southeast Asia and South America. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2000/05/23/20040817BIT20430/wkr0001.pdf