This is a "semi-equity capital" instrument which Orkla's Financial Investments division sometimes uses as an alternative to investing in shares, particularly in the case of unlisted companies. As is already known, a convertible loan entails a somewhat smaller upside than shares, but also less risk. At the same time, it specifies a predetermined exit date if the loan is not converted into shares.
In other words, Orkla's purpose was to participate in most of the upside inherent in the equity capital. The fact that the investment in NWSH has not lived up to expectations does not alter this starting point. At the same time, it is clear that the investment has greater value today than it would have done if it had been a pure share investment.
Group President and CEO Finn Jebsen comments:
"Orkla is not a bank and our financial investments business targets the upside inherent in equity capital investments. At the same time, we accept that there will then also be a greater risk of loss. The way we run our financial investments business cannot be measured on the basis of the results of individual investments, but on the basis of the return on the total portfolio over time."
- - - - - - - - - -
We otherwise refer to the reports from Orkla's Committee of Inquiry, the report by Finn Jebsen to Orkla's Annual General Meeting on 3 May 2001 and the notice that was issued on 8 October 2002 concerning a reduction in our involvement in NWSH, all of which are available on www.orkla.com.