New issue in SCA with preferential rights to SCA's shareholders ensures

  • Regulatory press release

New issue in SCA with preferential rights to SCA's shareholders ensures continued high pace of expansion in hygiene products and packaging During the past 18 months, as part of its growth strategy and the ongoing realignment from traditional forest industry products to hygiene and packaging products, SCA has implemented strategic investments, mainly through company acquisitions, in an amount totally SEK 14 billion -including the acquisition announced today of the British tissue company. During the same period a decision was reached regarding the fine paper operations, which on 1 October will be transferred to a new company together with MoDo's fine paper operations. As announced earlier, the intention is at a later date to list the new company, to be named MoDo Paper AB, on the stock exchange. As a result of these actions, the portion of hygiene and packaging operations increases from 64% to 80% of the Group's sales and the goal is to increase this proportion through acquisitions and other measures. Negotiations are currently in an advanced stage regarding acquisition of two additional hygiene companies and two packaging companies. In order to ensure a continued high pace in the growth process within hygiene and packaging, SCA's Board of Directors today decided, conditional upon the approval of an Extraordinary General Meeting of shareholders, to carry out a new issue in which six Series A or B shares carry rights to acquire one new Series B share. The issue price is set at SEK 140 per share. In total, the issue is expected to generate proceeds of approximately SEK 4.6 billion. The issue is supported by SCA's largest shareholders, Industrivärden, Custos and Handelsbanken's foundations, which have stated that they intend to exercise the forthcoming subscription rights. A number of SCA's large institutional owners have also stated that they favor the issue. The issue proceeds will be used to finance the acquisition of the British tissue company announced today and the additional acquisition possibilities in the hygiene and packaging areas currently being considered by SCA. The availability of operations strategically valuable for SCA is considerable today and is being strengthened by the spirit of consolidation that is currently prevailing in the European and North American markets. As a result of the issue, the planned expansion can be carried out within the framework for debt ratios which give the Group a continued favorable negotiation position in credit markets. The issue decision means that only B shares will be issued. The portion of total shares represented by B shares will thereby rise to about 74%. In addition to the conversion clause, which facilitates conversion of A shares to B shares, that was included in the Articles of Association this spring, the selection of the B share is intended to further increase the liquidity in trading of SCA shares. Timeplan Extraordinary General Meeting 21 September SCA-share listed ex-rights to participate in the new issue 22 September Record date for entitlement to subscription rights 24 September Publication of prospectus 28 September Trading in subscription rights 1-18 October Subcription period 1-22 October Stockholm 31 August 1999 SVENSKA CELLULOSA AKTIEBOLAGET SCA (publ) Corporate Communications For further information please contact: Sverker Martin-Löf, President and CEO. Tel. +46 8 788 51 51 Sten Lindholm, Senior VP, Corporate Communications. Tel. +46 8 788 51 62 ------------------------------------------------------------ Please visit for further information The following files are available for download: