STOCKHOLM, Sweden, July 23, 2003 (PRIMEZONE) -- Framfab plans to carry out a limited special issue of new shares for the purpose of strengthening its financial position and providing greater security for its clients.
Framfab's clients, which consist chiefly of large multinational groups, seek suppliers that are financially strong. Thus, the company deems it desirable to reinforce its financial position in order to continue attracting new clients and retaining existing ones. A special issue of new shares will provide Framfab with the opportunity to increase the number of its big shareholders and ensure a favorable financial position prior to the likely consolidation of the sector, in which the company plans to play an active role.
Framfab's cash flow of SEK -1.9 million for the second quarter represented a considerable improvement over the first quarter. Proceeds of SEK 12.8 million from the divestment of shares in B2 Bredband AB will strengthen Framfab's cash position in the third quarter.
As previously announced, Framfab's Malmo and Stockholm operations were restructured during the second quarter and 30 employees left the company. The company has decided to launch further measures in the Group. The measures will reduce annual costs in excess of SEK 40 million, but will result in short-term charges on Framfab's earnings and cash flow. In addition, the third quarter is traditionally weak and clients are demanding more extended terms of payment for big assignments. As a result, the board has decided to increase the company's liquidity reserve.
Given the current shareholder structure, an issue that accords priority to existing shareholders would be time-consuming and entail high transaction costs. Thus, the board does not regard such an option to be defensible given that the company has only a small capital requirement. A special issue of new shares, which will allow greater latitude to adjust the amount issued to the company's needs, can be carried out in a timely and cost-effective manner.
In view of the above, the board has decided to convene a special meeting of shareholders for August 8, 2003 and to propose that the meeting authorize the board to, on one or more occasions until the next annual general meeting, issue a total of no more than 130,000,000 new shares to a limited number of strategic or financial investors. Determination of the subscription price is to be based on the market value of the company's stock at the time of each issue.
Assuming that the issue is fully subscribed for at a subscription price corresponding to the current market value of the stock, Framfab will raise approximately 39 million kronor prior to underwriting costs. If the issue is fully subscribed for, the company's share capital and votes will be diluted by approximately 20%.
The notice convening the special meeting of shareholders will appear in the Svenska Dagbladet and Post och Inrikes Tidningar newspapers on July 24, 2003.
For more information, please contact:
Sven Skarendahl, Chairman of the Board, Framfab AB +46 8 41 00 10 00, sven.skarendahl@framfab.se
Anders Ekman, CEO, Framfab AB +46 8 41 00 10 00, anders.ekman@framfab.se
Christian Luiga, CFO, Framfab AB +46 8 41 00 10 00, christian.luiga@framfab.se
Tobias Bulow, Group Communications Manager, Framfab AB +46 709 41 22 58, tobias.bulow@framfab.se
Framfab is a leading supplier of consulting services and business solutions based on Internet technology. The company's clients are primarily large international firms, including 3M, AXA, Coca-Cola, Danske Bank, Electrolux, Ericsson, Hydro Texaco, IKEA, Kellogg's, Maersk Sealand, NEC Packard-Bell, Nike, Observer, Postbank, SAAB, Volvo Car Corporation and UBS. Framfab has operations in Denmark, Germany, the Netherlands and Sweden. The company is quoted on the O list of the Stockholm Stock Exchange (ticker symbol FRAM). For additional information, go to www.framfab.com
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