The settlement with Equatorial involves payments of USD 101 million by Aker Kvaerner's US subsidiary to Equatorial. Insurance proceeds will cover USD 75 million of the USD 89 million that will be paid now. The remaining amount will be paid in two USD 6 million installments, in 2005 and 2006 respectively.
The parties have agreed to discontinue all legal processes and close the books concerning the Tonopah project in Nevada, US. The accounting effect for the Equatorial settlement was an exceptional charge of NOK 330 million in the fourth quarter 2003, including costs and write-off of receivables.
As previously reported the Aker Kvaerner group has a number of ongoing legal disputes, most of which originated in 2001 and before. The group is working diligently to resolve these cases without incurring unnecessary costs. During the fourth quarter 2003, close to fifteen such cases were resolved without significant negative accounting and cash effects.
Among the more significant are an insurance claim related to the construction of a drilling rig at Kvaerner Warnow Werft in 2001 and a project dispute related to a Scottish waste treatment plant that started up in 1999.
Under a separate programme, Aker Kvaerner has aimed to release capital through sales and leaseback of real estate. In the fourth quarter 2003, agreements were made to sell properties in Sweden, Norway and the US, some of them are still pending completion of due diligence. The combined accounting effect of these transactions is a gain of NOK 55 million in the first quarter of 2004, while the accumulated cash flow will be positive NOK 375 million.
ENDS
For further information, please contact:
Media:
Geir Arne Drangeid, SVP Group Communications, Aker Kværner ASA. Tel: +47 913 10 458
Geir Arne Drangeid, SVP Group Communications, Aker Kværner ASA. Tel: +47 913 10 458
Investor relations:
Tore Langballe, Vice President, Aker Kværner ASA, Group Comms. Tel: +47 907 77 841
Tore Langballe, Vice President, Aker Kværner ASA, Group Comms. Tel: +47 907 77 841
Aker Kværner ASA
is through its subsidiaries and affiliates ("Aker Kvaerner") a leading global provider of engineering and construction services, technology products and integrated solutions. The business within Aker Kvaerner spans a number of industries, including Oil & Gas production, Refining & Chemicals, Pharmaceuticals & Biotechnology, Mining & Metals, Power, Pulping and Shipbuilding. Aker Kvaerner has aggregated annual revenues of approximately USD 6 billion and employs around 35,000 employees in more than 30 countries.
This press release may include forward-looking information or statements and is subject to our disclaimer, see our web-pages www.akerkvaerner.com