Kvaerner Prospectus Supplement; Update on Longview; Conditions to Consummation of the Demerger
The Norwegian Financial Supervisory Authority (Nw. Finanstilsynet) has informed Kvaerner that its prospectus supplement dated 4 July 2011 - containing supplemental information relating to the Longview project and resolutions of the Board of Directors of Aker Solutions and Kvaerner - has been approved.
Update on the Longview project:
Kvaerner has been informed that Longview Power LLC (Longview), the owner of the Longview project, has issued a demand for payment under a letter of credit supplied by Kvaerner for the project, while Kvaerner North American Construction Inc. (a subsidiary of Kvaerner following consummation of the demerger of Aker Solutions) has initiated arbitration against both Longview and Foster Wheeler North America Corp., the supplier of the boiler for the Longview project. Kvaerner North American Construction Inc. experienced an increase in the cost of construction of the project from a number of causes, including force majeure events, changes to the project, and third party actions in furnishing engineering services, equipment and materials, all of which have directly and adversely impacted North American Construction Inc.’s project work. The arbitration is intended to recover excess construction costs and other damages incurred by Kvaerner North American Construction Inc. in execution of the project.
As a result of the recent developments in respect of the Longview project and the strained commercial relation between the various parties to the project, Kvaerner has decided to make a further loss provision of U.S. dollar 50 million in respect of the project in the second quarter of 2011. This is not a profit warning. Other parts of the Kvaerner Group are expected to deliver strong operational results in the second quarter of 2011.
By making a further provision of U.S. dollar 50 million in the second quarter of 2011 in respect of the project, the risk for further losses resulting from the final settlement of the project accounts is reduced. However, there are still substantial uncertainties with respect to the final financial outcome of the project.
For further information on the Longview project, please refer to Kvaerner’s listing prospectus dated 15 June 2011, as supplemented by the prospectus supplement dated 4 July 2011.
Conditions to Consummation of the Demerger:
The Boards of Directors of Aker Solutions and Kvaerner have considered the fulfillment of the conditions to consummation of the demerger of Aker Solutions as set out in the demerger plan. All the conditions were found to have been fulfilled with except to expiry of the creditor notice period applicable to the Demerger which, bearing unforeseen circumstances, will expire on 6 July 2011. For information concerning certain post-closing measures to be undertaken, please refer to the prospectus supplement dated 4 July 2011.
As of the date hereof there are no changes to the previously communicated indicative timetable for the consummation of the demerger and the listing of the shares of Kvaerner on the Oslo Stock Exchange (Nw. Oslo Børs).
Availability of Documents:
Aker Solutions ASA, through its subsidiaries and affiliates (“Aker Solutions”), is a leading global oil services company that provides engineering and construction services, technologies, product solutions and field-life solutions for the oil and gas industry. The Aker Solutions group is organised in a number of separate legal entities. Aker Solutions is used as the common brand/trademark for most of these entities.
Aker Solutions’ parent company is Aker Solutions ASA. Aker Solutions has aggregated annual revenues of approximately NOK 47 billion and employs approximately 20 000 people in about 30 countries. These figures include Aker Solutions’ wholly owned subsidiary Kvaerner.
This press release may include forward-looking information or statements and is subject to our disclaimer, see www.akersolutions.com
Cautionary Note Regarding Forward-Looking Statements:
This release includes forward-looking statements that reflect Kvaerner’s current views with respect to future events and financial and operational performance. Readers are cautioned that forward-looking statements are not guarantees of future performance and that the Kvaerner group’s actual financial position, operating results, liquidity, business and the development of the industry in which the Kvaerner group operates may differ materially from those contained in or suggested by the forward-looking statements contained herein. Kvaerner cannot guarantee that the intentions, beliefs or current expectations upon which its forward-looking statements are based will occur.
This information is subject of the disclosure requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act.
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