FLS Industries A/S concludes new conditional agreement on sale of Secil shares

In an announcement to the Copenhagen Stock Exchange of December 6, 2002 it was stated that the conditional sale of the shares in FLSHH SGPS, Lda. was not concluded, since the buyer, Semapa S.A., had not obtained financing of the purchase within the agreed deadline (cf. notifications to the Copenhagen Stock Exchange dated October 4, 2002 and November 12, 2002).

As grounds for the lack of financing Semapa has stated that on December 5, 2002, the lender required that the financing transaction be adopted by Semapa's general meeting. Semapa could not meet this condition within the agreed deadline.

Semapa has now stated that it has signed a loan agreement to finance the purchase sum. A condition for the loan agreement is that the financing transaction be finally and validly adopted by majority decision at a general meeting in Semapa. This meeting must be convened with 30 days' notice. Shareholders representing more than 50% of the votes at Semapa's general meeting have undertaken to vote for the agreement. The financing is furthermore conditional on the fulfilment of a number of terms that are customary in international loan agreements, including that no material adverse changes occur.

Against this background, on December 23, 2002 Højgaard Holding a/s and FLS Industries A/S concluded a new conditional agreement with Semapa on sale of the shares in FLSHH SGPS, Lda., the owner of the companies' shares in the cement group Secil, S.A.

It has been agreed that closing of the sale of the shares in FLSHH will take place at the earliest 30 days after adoption of the sale by Semapa's general meeting. The conditional agreement will lapse if the sale has not gone through by March 25, 2003 at the latest.

The price for the FLSHH shares was fixed in the conditional agreement of October 4, 2002 and accrues interest from November 18, 2002 until the date of acquisition. Excluding interest, the price for FLS Industries A/S' share is EUR 152 million, corresponding to DKK 1,128 million.
The sale will generate an accounting profit in the range of DKK 700m, which is not liable to tax. It will have a positive impact on the consolidated shareholders' equity to the tune of DKK 340m.

The sale of the shares is in line with the strategic plan which the Board of Directors announced in August 2002, a plan that focuses on the development of the Group's two core businesses, F.L.Smidth Group and FLS Building Materials.

With this divestment plus additional disposals, including the sale of Unicon's American ready-mix concrete and pumping activities, the FLS Group is reducing its net interest-bearing debt to around DKK 2bn. At the end of 2001, net interest-bearing debt amounted to DKK 5bn. The Group is thus taking another important step towards its strategic goal. Reducing the net debt to a level of approximately DKK 2bn matches the Group's future scope of business. This will ensure financial flexibility, which is a precondition for being able to maintain and expand the leading market positions of the Group's two core activities in the future.

FLS Industries A/S
Corporate Public Relations