The agreement is not made conditional upon further examination of the companies on the part of the buyer. The conditions relate exclusively to the achievement of acceptance from minority shareholders as well as to matters concerning the transaction and taxation. The parties have agreed that the transaction will not require Brødrene Hartmann A/S to put up any guarantees and indemnities.
The sale involves an adverse effect of approx. DKK 50 million on the result of discontinued operations. This effect on the Group's result - as stated in the Annual Report 2006 - has not been included in the announced expectations for 2007. As a result of the transaction, the amount in net interest-bearing debt for the Group (including South America) will increase by approx. DKK 40 million.
The agreement involves a 5-year distribution of profit between buyer and seller. It also follows from the agreement that Hartmann will retain ownership of a piece of land likely to be sold before the end of the year. The overall effect on the Group's result does not take account of a possible positive effect of these agreements.
As announced in the Annual Report 2006, foreign exchange losses from prior years relating to the operations in South America will be reclassified effective from the date of the transaction from equity capital to the income statement under the result of discontinued operations. The amount involved as of 31 March 2007 has been recognised at approx. DKK 187 million. As previously announced the reclassification will have no effect on equity capital and liquidity.
The final completion of the transaction and, hence, the handing over of the operations is expected to take place as soon as possible and before the end of first half-year, as announced in the Annual Report 2006.
The operations in South America comprise three production plants in Brazil and Argentina, where Hartmann set up business in the late 1990s. The divestment reflects the wish of Brødrene Hartmann to consolidate and strengthen the focus on its remaining business.
Contact: Peter Arndrup Poulsen, CEO
Peter A. Poulsen
CEO
Brødrene Hartmann A/S
