KLIPPAN, Sweden, March 16, 2005 (PRIMEZONE) -- The board of KLIPPAN AB has today reached a decision to adopt a new structural plan and to initiate negotiations in accordance with the law on self-determination at work regarding the closing-down of the operation at Molndal with the exception of Board Service Center, that is the plant for cutting board into sheets. It is proposed to move the paper production to Klippan and Lessebo.
Over the last few years, KLIPPAN has suffered from a long drawn-out recession with falling sales volumes for the majority of KLIPPAN's products. During 2004, the board carried out a number of measures aimed at reducing fixed costs in particular, which among other things has entailed high costs of a one-off character for the company. The work of re-structuring KLIPPAN will continue in the new structural plan.
As one step in re-financing KLIPPAN for the continued re-structuring, and to create pre-conditions for KLIPPAN to capitalize on future business opportunities, the board has decided to propose a new share issue, with pre-emption rights for the company's current shareholders, amounting to approximately MSEK 200. It is proposed to carry out the new share issue during the second quarter of 2005.
The board therefore proposes that the annual general meeting authorizes the board to reach a decision about a new share issue of approximately MSEK 200 with pre-emption rights for the company's current shareholders. Notice of the annual general meeting, which will be held at Klippan on 9 May 2005, will be published in a separate press release. Shareholders representing 36 percent of the number of shares and 36 percent of the number of votes have today reported being positive about the new share issue and will vote in accordance with the board's proposal at the annual general meeting.
Nordea Corporate Finance has been appointed as financial advisor for the new share issue.
The decisions to sell the real estate at Molndal and to acquire the French paper mill Papeteries de Maresquel remain firm and negotiations are in progress to reach a conclusion.
KLIPPAN is a leading producer of speciality paper for the graphic industry with a total capacity of 200,000 tons per year. Production is carried out at the three mills in Klippan, Lessebo and Molndal.
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-0- KLIPPAN AB Jan Bernander, chairman of the board +46 (0) 708-55 64 00 Thomas Billing, MD +46 (0) 705-85 08 98