OSLO, Norway, Sept. 26, 2002 (PRIMEZONE) -- The publicly quoted Danish company, Korn og Foderstof Kompagniet (KFK) (Copenhagen:KORN), in which Norsk Hydro (NYSE:NHY) has a 68.8 percent ownership interest, today announced that an agreement has been signed whereby a considerable share of the company's business operations will be taken over by a consortium within the Danish agricultural cooperative sector.
KFK's Danish agricultural business, as well as the company's trading and distribution operations in a number of European countries, are being sold jointly to Dansk Landbrugs Grovvareselskap and other Danish agricultural cooperative members. The businesses being sold had a total turnover in 2001 of some DKK 6 billion and roughly 1,250 employees who will now be transferred to the new owners. The cash consideration to be received for the activities is approximately DKK 1.6 billion after deductions for debts.
The businesses being sold have performed weakly in recent years.
The sale is expected to result in a loss of close to NOK 100 million for Norsk Hydro, which will be charged to third quarters earnings.
The transaction is conditional on acceptance by KFK's general meeting and the approval of the authorities and is expected to take place during fourth quarter 2002. The buyers carry the financial risks related to approval by the authorities. Following the transaction, the remaining KFK activities will continue operating under the name of Treka A/S, which will comprise the companies BioMar, Bioenergi, Svenska Fode and Salt. These enterprises had a total turnover of approximately DKK 4 billion in 2001 and roughly 800 employees. The remaining parts of the activities showed EBIT of DKK 87 million in 2001, while the activities to be sold showed EBIT of DKK 16 million in 2001.
Negotiations on a sale of Svenska Foder are ongoing, and sale of further businesses from KFK is being considered.
Norsk Hydro will propose to the remaining KFK shareholders that a share of the consideration from the sale of operations be reallocated to shareholders.
Hydro has previously announced that it intends to divest activities which are not part of the company's core business. With the agreement now signed that relates to a considerable share of KFK's business, Hydro has in the course of this year sold or agreed to sell for roughly NOK 3 billion, operations that are not part of core business.
Certain statements in this press release are or may constitute "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not in the nature of historical facts may be deemed to be forward-looking statements and may contain identifying words such as "believes," "anticipates," "plans," "expects" and similar expressions. These forward-looking statements are based on Hydro's current expectations, assumptions, estimates and projections about the company and the industries in which it engages in business. All forward-looking statements involve risks and uncertainties. For a detailed description of factors that could cause Hydro's actual results to differ materially from those expressed in or implied by such statements, please refer to its annual report on Form 20-F for the yearended December 31, 2001 and subsequent filings on Form 6-K with the U.S. Securities and Exchange Commission.