BOARD OF DIRECTORS OF SPONDA PLC HAS DECIDED ON A NEW ISSUE

BOARD OF DIRECTORS OF SPONDA PLC HAS DECIDED ON A NEW ISSUE

 

The Board of Directors of Sponda Plc has decided today, based on the share issue authorization granted by the Extraordinary General Meeting of January 5, 2007, on a new issue in which a maximum of 31,722,910 new shares shall be offered to be subscribed for by shareholders, at a subscription price of EUR 7.80 per share. Provided that the issue is fully subscribed for, EUR 247,438,698 will be raised through the issue.

 

The shareholders shall have a pre-emptive right to subscribe for new shares, with a nominal value of one (1) euro, in proportion to their current shareholding in the company. A shareholder who is registered in the company's shareholders' register maintained by the Finnish Central Securities Depository Ltd on the record date of the offering on January 12, 2007, or a shareholder whose shares are nominee registered on the record date in the shareholders' register maintained by the Finnish Central Securities Depository Ltd, will automatically receive one freely transferable subscription right as a book-entry for every share owned.

 

For every five (5) subscription rights, the shareholder or person or entity to whom the shareholders' subscription rights have been transferred, will be entitled to subscribe for two (2) new shares. The subscription rights will trade on the Helsinki Stock Exchange from January 17, 2007 until January 26, 2007.

 

The share subscription period commences on January 17, 2007, and expires at 5:00 p.m., Finnish time on February 2, 2007. 

 

Merrill Lynch International and Nordea Bank Finland Plc will act as the joint global coordinators and joint bookrunners for the offering.

 

Based on the share issue authorization granted by the Extraordinary General Meeting, the Board of Directors is entitled to organize a secondary placement after the expiry of the shareholders' pre-emptive subscription right on February 2, 2007.

 

The joint global coordinators and the company may separately agree on the placement of offer shares that have not been subscribed for during the subscription period. The joint global coordinators may, either (i) use their reasonable efforts to procure subscribers for the remaining offer shares; or (ii) in the sole discretion of the joint global coordinators, subscribe for the remaining offer shares and sell such remaining offer shares, in each case, on the market or through a book-building process. In such case, the subscription price to be paid to the company for such remaining offer shares shall be EUR 7.80 per remaining offer share.

 

The joint global coordinators shall pay the net proceeds of any such sale (proceeds from the sale of any remaining offer shares less the subscription price, the fees of the joint global coordinators, any transfer tax and other costs) to the holders of the unexercised rights that had entitled the holders thereof to subscribe for such remaining offer shares. It is expected that the net proceeds will be paid on or about February 13, 2007.

 

The company intends to use the net proceeds from the offering to repay some of the short-term loan that was put in place to finance the acquisition of all of the shares of Kapiteeli Plc.

 

The specific terms and conditions of the offering are set out in the appendix to this stock exchange release.

 

The offering circular relating to the offering will be published on or about January 10, 2007.

 

In the placing agreement entered into between the company and the joint global coordinators of the offering, the company and its affiliates have agreed on transfer restrictions specified in more detail in the said agreement regarding the company's shares and other instruments entitling to such shares and other restrictions concerning arrangements that will lead to a corresponding conclusion when completed. In addition, the company has agreed not to issue new shares or any securities entitling to subscribe for the company's shares. These restrictions will be in force during the period commencing on January 9, 2007 and ending 180 days from the date of the listing of the offer shares on the Helsinki Stock Exchange. No exceptions to the restrictions may be made without prior written consent of the joint global coordinators. The restrictions are not applicable to acquiring or selling shares based on the authorization granted by the Annual General Meeting of 29 March 2006 of the company, or to a renewal of this authorization.

 

The State of Finland has agreed to corresponding transfer restrictions regarding the shares owned by it and other restrictions concerning arrangements that will lead to a corresponding conclusion when completed. These restrictions will be in force during a period commencing on January 9, 2007 and ending 90 days from the date of the listing of the offer shares on the Helsinki Stock Exchange. No exceptions to the restrictions may be made without the prior written consent of the joint global coordinators.

 

 

Helsinki, January 9, 2007

 

 

 

Sponda Plc

 

The Board of Directors

 

 

 

Further information:

President and Chief Executive Officer Kari Inkinen, tel. +358 9 6805 8202 or +358 400 402 653

 

Chief Financial Officer Robert Öhman, tel. +358 9 6805 8206 or +358 40 540 0741

 

The information contained herein is not for release, publication or distribution, directly or indirectly, in or into Australia, Canada, Japan or the United States. This release does not constitute an offer to sell subscription rights or shares in Australia, Japan, Canada or the United States (save for exemption regarding the private placement). The shares referred to in the release may only be offered or sold in the United States pursuant to an exemption from registration requirements as provided for in the U.S. Securities Act of 1933, or in a transaction not subject to U.S. Securities Act of 1933 or any applicable laws of the states of the United States. There is no intention to register this offering or any portion of it in the United States or to conduct a public offering of the shares in the United States.

 

This release does not constitute a direct or indirect offer to sell or acquire securities, nor shall there be any sale of the shares in any jurisdiction in which such offer or sale would be unlawful prior to registration of the shares, exemption from registration requirement or other qualification under the securities laws of any such jurisdiction.

 

This release does not constitute an offer of securities to the public in the United Kingdom. No offering circular has been or will be registered in the United Kingdom in respect of the securities, and consequently, the offering is directed only to persons who (i) are outside the United Kingdom or (ii) are persons falling within Article 19(5) ("investment professionals") of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (all such persons together being referred to as "relevant persons"). This release or any of its contents must not be acted on or relied on by persons who are not relevant persons.

 

Merrill Lynch and Nordea are acting for Sponda and for no-one else in connection with the offering and will not be responsible to anyone other than Sponda for providing the protections afforded to the respective clients of Merrill Lynch or Nordea nor for providing any advice in relation to the offering.

 

 

APPENDIX

 

TERMS AND CONDITIONS OF THE OFFERING

 

On January 5, 2007, the Extraordinary General Meeting of Sponda authorized the company's Board of Directors to decide on a new issue in which the shareholders shall have the pre-emptive right to subscribe for new shares with a nominal value of EUR 1.00 per share in proportion to their current shareholding in the company. The number of new shares issued based on the authorization may not exceed 79,307,275 shares. The Board of Directors was authorized to decide upon other terms of the offering. The authorization includes a right to decide, secondarily, on the offering of the remaining offer shares, if any, in a rump placement to investors and/or the joint global coordinators.

 

On January 9, 2007, the Board of Directors of the company has resolved, based on the authorisation of the Extraordinary General Meeting, to issue a maximum of 31,722,910 new offer shares as set forth in these terms and conditions of the offering.

 

As a result of the offering, the share capital of the company may increase from EUR 79,307,275 to a maximum of EUR 111,030,185, and accordingly the total number of the company's shares may increase from 79,307,275 shares to a maximum of 111,030,185 shares. The offer shares in the offering represent 40 percent of the total shares and the voting rights of the company prior to the offering.

 

Right to subscribe

 

The offer shares will be offered for subscription to the shareholders of the company in proportion to their shareholding in the company.

 

The record date for the offering is January 12, 2007.

 

A shareholder who is registered in the company's shareholders' register maintained by the Finnish Central Securities Depository Ltd (the "FCSD") on the record date or a shareholder whose shares are nominee registered on the record date in the shareholders' register maintained by the FCSD, will automatically receive one (1) freely transferable right as a book-entry (ISIN code FI0009503007) for every share owned on the record date.

 

A shareholder, or a person or an entity to whom such shareholder's rights have been transferred, is entitled to subscribe for two (2) offer shares for every five (5) rights. No fractions of shares will be allotted.

Subscription price

The subscription price is EUR 7.80 per offer share.

 

According to the decision made by the Board of Directors, EUR 1.00 of the subscription price shall be entered into the share capital of the company and the remaining amount into the paid-up unrestricted equity reserve.

 

Subscription period

The subscription period will commence on January 17, 2007, and expire at 5:00 p.m. Finnish time on February 2, 2007. The places of subscription will accept subscription assignments during their normal business hours.

 

Account operators and custodians may ask their customers to submit their subscriptions at an earlier date than the end of the rights trading period.

Places of subscription

 

Subscriptions can be made at the branches of Nordea Bank Finland Plc, the offices of Nordea Private Banking, as well as through Nordea Customer Service by phone with bank codes, tel. +358 200 3000 (Finnish) and tel. +358 200 5000 (Swedish).

 

In addition, subscriptions may be submitted to the account operators and custodians who have an agreement with Nordea Bank Finland Plc.

Exercise of rights

 

A shareholder or other investor may participate in the offering by subscribing for offer shares pursuant to the rights registered on his or her book-entry account and by paying the subscription price. In order to participate in the offering, a shareholder or other investor must submit a subscription assignment in accordance with the instructions given by his or her own custodian or account operator.

 

Shareholders and other investors participating in the offering, whose shares or rights are held through a nominee (or other custodian), must submit their subscription assignments in accordance with the instructions given by their custodial nominee account holders. Any exercise of the rights is irrevocable and may not be modified or cancelled otherwise than as stated in the section below entitled "Cancellation of subscriptions under certain circumstances".

 

Any unexercised rights will expire at the end of the subscription period on February 2, 2007.

 

Placement of remaining offer shares

The joint global coordinators and the company may separately agree on the placement of offer shares that have not been subscribed for during the subscription period. The joint global coordinators may, subject to the satisfaction of conditions as set forth in the placing agreement and such separate agreement with the company, if any, either (i) use their reasonable efforts to procure subscribers for the remaining offer shares, or (ii) in the sole discretion of the joint global coordinators, subscribe for the remaining offer shares and sell such remaining offer shares, in each case, on the market or through a book-building process. In such case, the subscription price to be paid to the company for such remaining offer shares shall be EUR 7.80 per remaining offer share and EUR 1.00 of the subscription price shall be paid to the company's share capital and the remaining part to the company's paid-up unrestricted equity reserve.

 

The joint global coordinators shall pay the net proceeds of any such sale (proceeds from the sale of any remaining offer shares less the subscription price, the fees of the joint global coordinators, any transfer tax and other costs) to the holders of the unexercised rights that had entitled the holders thereof to subscribe for such remaining offer shares. It is expected that the net proceeds will be paid on or about February 13, 2007.

 

The holder of rights may, at will, refuse the receipt of the net proceeds by notifying their account operators in writing thereof within the subscription period.

 

However, inasmuch as any sale or subscription of the remaining offer shares is subject to a further supplementary agreement by and among the joint global coordinators and the company and is also subject to market conditions, there can be no assurance of the sale or subscription of such remaining offer shares. Therefore, the holders of any unexercised rights may not receive any proceeds in relation thereto. The joint global coordinators may undertake the procedure described above with respect to expired rights without the consent of the holder of the rights. The joint global coordinators have no obligation to sell or procure subscribers for the remaining offer shares and the joint global coordinators may, with the company's consent, accept offers lower than the market price for the remaining offer shares. The company shall approve any final sales of the remaining offer shares and the subscriptions.    

Cancellation of subscriptions under certain circumstances

 

Investors, who have undertaken to subscribe for the offer shares, are entitled to cancel their subscription according to the Finnish Securities Market Act in the event that the offering circular is supplemented due to a material mistake or inaccuracy relating to the information in the offering circular, which could affect the assessment of the offer shares. The subscription must be cancelled within two (2) banking days from the publication of the supplement to the offering circular. The Financial Supervision Authority has a right to decide that the cancellation period is at least four (4) banking days. The cancellation right may only be used if the investor has undertaken to subscribe for the offer shares prior to the publication of the supplement to the offering circular and the supplement is published between the time the offering circular was approved by the FSA and the time when trading with the interim shares begins. The procedure allowing for the cancellation of subscriptions will be announced together with any such supplement to the offering circular through publishing a stock exchange release.

Public trading of the rights

 

The rights are freely transferable and will be publicly traded on the Helsinki Stock Exchange from January 17, 2007. The public trading of the Rights will end on January 26, 2007. The available price on the Helsinki Stock Exchange for the rights will be determined in market trading. The rights may be acquired or transferred by giving purchase or sell orders to the holder's own custodian or account operator or to any broker.

 

The trading symbol of the rights is SDA1VU0107.

Payment for the subscriptions

 

The subscription price of the offer shares subscribed for in the offering shall be paid in full at the time of subscription in accordance with the instructions given by the place of subscription or the relevant custodian or account operator.

Approval of the subscriptions

 

The Board of Directors of the company will approve all subscriptions pursuant to the rights made in accordance with these terms and conditions of the offering and applicable laws and regulations and valid at the end of the subscription period.

 

The company will publish the final result of the offering in a stock exchange release on or about February 7, 2007.

Registration of the shares to the book-entry accounts and trading with the offer shares

 

The offer shares subscribed for in the offering will be issued in book-entry form in the book-entry system maintained by the FCSD. The offer shares will be recorded on the subscriber's book-entry account after the approval of the subscription as interim shares (ISIN code FI0009015051, trading under the symbol SDAVN0107) representing the offer shares. Trading in such interim shares will commence on the first trading day following the expiration of the subscription period on or about February 5, 2007.

 

The interim shares will be combined with the company's existing class of shares (ISIN code FI0009006829, trading under the symbol SDA1V) when the increase of the share capital has been registered with the Trade Register. Such combination is expected to occur on or about February 9, 2007. The offer shares are freely transferable.

Shareholder rights

 

The offer shares will entitle their holder to any future dividends declared by the company and to other shareholder rights in the company after the respective increase in the share capital of the company has been registered with the Trade Register, which is expected to take place on or about February 9, 2007. The shares subscribed for in the rump placement will entitle their holder to corresponding rights after the respective increase in the share capital of the company has been registered with the trade register.

Information

 

The documents referred to in Chapter 5, Section 21 of the Finnish Companies Act, are available for review at the head office of the company, Korkeavuorenkatu 45, FI-00130 Helsinki and on the company's website www.sponda.fi/osakeanti.

Applicable law and dispute resolution

The offering and the shares shall be governed by the laws of Finland. Any disputes arising in connection with the offering shall be settled by the court of jurisdiction in Finland.

Other issues

 

Other issues and practical matters relating to the increase of share capital and the offering will be resolved by the Board of Directors of the company.