STOCK EXCHANGE RELEASE 28 November 2008 at 10:14 a.m SAVCOR GROUP LTD OY ANNOUNCES THAT IT CONSIDERS MAKING A VOLUNTARY TENDER OFFER FOR ALL THE SHARES AND OPTION RIGHTS IN CENCORP PLC AND PROPOSING A CORPORATE TRANSACTION TO THE COMPANY Savcor Group Ltd (“Savcor”) has conducted negotiations with Cencorp plc (“Cencorp”) and its main financier Sampo Bank plc (“SP”) relating to strengthening the financial position of Cencorp. As a result of the negotiations Cencorp, SP and Savcor have on 28 November 2008 signed an agreement on a conditional financing arrangement according to which Cencorp convenes an extraordinary general meeting to resolve upon share issues, amendment of the articles of association and election of new Board of Directors which have been described in more detail in the stock exchange release of Cencorp attached hereto as appendix 1 (“Conditional Financing Arrangement”). Savcor has on 28 November 2008 purchased 5,311,213 shares in Cencorp and has notified the purchases of shares by a separate flagging notification. In connection with the Conditional Financing Arrangement Savcor and Markku Jokela as well as FT Capital Ltd being controlled by him (hereinafter “Jokela”) have also agreed on a plan to propose to Cencorp a corporate transaction (“Transaction”) in relation to which Savcor would also make a voluntary tender offer for all the shares and option rights in Cencorp (“Tender Offer”). In addition, Savcor and SP have agreed on certain sub-arrangements relating to the Conditional Financing Arrangement and the Tender Offer. The Transaction and the Tender Offer are dealt with in more detail hereafter in section “2. TRANSACTION” and “3. TENDER OFFER”. 1. CONDITIONAL FINANCING ARRANGEMENT The Conditional Financing Arrangement and the related decisions to be proposed to the shareholders' meeting of Cencorp are described in more detail in Cencorp's stock exchange release attached hereto as appendix 1. The Board of Directors of Cencorp submits at first the proposed share issues related to the Conditional Financing Transaction, the proposal on electing new Board of Directors as well as the proposal on amending the articles of association to the shareholders' meeting for its decision. In case the shareholders' meeting approves them, Savcor will propose to Cencorp the commencement of negotiations in order to carry out the Transaction. If the parties agree on the Transaction, Savcor will after this decide upon the commencement of the Tender Offer. The completion of the Conditional Financing Arrangement, the Transaction and the Tender Offer is conditional also upon the fulfilment of certain other preconditions agreed upon in an agreement between Savcor and Jokela. In case the Transaction and the Tender Offer are not completed, the Conditional Financing Arrangement is not to be completed either. As part of the Conditional Financing Arrangement SP would convert a convertible capital loan of approximately 2,689,008 euros into a total of 7,908,847 new shares of Cencorp and would also subscribe for a total of 44,594,041 new shares of Cencorp in the share issue directed to SP by Cencorp by paying the subscription price with its current senior loan receivable of 3,567,523.28 euros. The conversion of the convertible capital loan is not conditional upon the completion of the Transaction and the Tender Offer. In addition, as part of the Conditional Financing Arrangement SP would amend the interest and repayment terms of the remaining loan receivables from Cencorp into more favourable terms from Cencorp's point of view. In case the Conditional Financing Arrangement is completed, Cencorp would receive in the share issues to be arranged as part of it at least 2.05 million euros of new equity and at most 7.45 million euros of new equity depending on the final size of the pre-emptive rights issue and the amount of subscriptions. 2. TRANSACTION Provided that the shareholders' meeting of Cencorp makes the decisions required by the Conditional Financing Arrangement, Savcor proposes to the new Board of Directors of Cencorp to be elected the commencement of negotiations in order to carry out the Transaction. As part of the Transaction Cencorp would purchase the entire share capital of Savcor's indirectly owned company Savcor Alfa Ltd. A precondition for the purchase of Savcor Alfa Ltd would be that, immediately prior thereto, it would have purchased the businesses of Photonium Ltd and Akseli Lahtinen Ltd. The entry into force of the above-mentioned transactions would be conditional, among others, upon Savcor's decision to complete the Tender Offer in accordance with its terms. Savcor Alfa Ltd provides work stations and work cells based on laser technology for laser marking, laser cutting, laser welding and laser micromachining applications. Savcor Group Ltd owns the entire share capital of Savcor Face Group Ltd which owns the entire share capital of Savcor Alfa Ltd. Savcor Alfa Ltd's turnover for the latest financial period 1 January 2007 to 31 December 2007 was 2.0 million euros, EBITDA 0.22 million euros and the amount of interest-bearing net debts 0.43 million euros. Photonium Ltd designs and manufactures automation solutions for electronic industry and equipment for the production of optical fibers. The automation business of Photonium Ltd has been previously a part of Cencorp. Jokela owns directly or indirectly the majority of shares in Photonium Ltd. Akseli Lahtinen Ltd is an engineering company specialised in designing and producing manufacturing automation solutions for metal industry. Photonium Ltd owns the majority of shares in Akseli Lahtinen Ltd. Photonium Ltd's turnover for the latest financial period 1 January 2007 to 31 December 2007 was 5.0 million euros and EBITDA 0.75 million euros. Approximately 1.2 million euros of the turnover resulted from sales to Cencorp. Akseli Lahtinen Ltd's turnover for the latest financial period 1 March 2007 to 28 February 2008 was 1.1 million euros and EBITDA 0.21 million euros. In assessing the profitability of the businesses to be transferred from Photonium Ltd and Akseli Lahtinen Ltd it should however be noted that a substantial amount of R&D costs have been activated in the companies' balance sheets. The financing position of Photonium Ltd and Akseli Lahtinen Ltd is very tight and they currently have a large number of unpaid overdue debts. Particularly due to the delivery difficulties caused by tight financing situation of the companies, the combined turnover of the companies on the current financial period is anticipated to be substantially lower than in the previous financial period. The purpose of the Transaction is to make Cencorp an even more significant company specialised in automation solutions for the electronics industry and capable of offering more versatile and more effective automation solutions by way of laser know-how of Savcor Alfa Ltd and automation know-how brought into the company by the businesses of Photonium Ltd and Akseli Lahtinen Ltd. The consolidation of the businesses is expected to generate considerable synergies due to the complementary areas of strengths. Upon the completion of the Conditional Financing Arrangement the financial situation of the company will be improved which will help in maintaining customer relations and creating new ones. Savcor and Jokela have agreed that in case the Transaction is completed the combined enterprise value (EV)of the businesses of Photonium Ltd and Akseli Lahtinen Ltd to be transferred to Savcor Alfa Ltd in the Transaction would be 5.5 million euros. As part of the business all assets (including fixed and current assets and intellectual property rights) which are necessary for the continuance of the businesses of Photonium Ltd and Akseli Lahtinen Ltd as well as interest-bearing net debts worth approximately 1.2 million euros in total would be transferred to Savcor Alfa Ltd. Also the employees of Photonium Ltd and Akseli Lahtinen Ltd would be transferred as part of the businesses to Savcor Alfa Ltd as so called “old employees”. Savcor Alfa Ltd would finance the share purchase price of 4.3 million euros payable in cash for the businesses to be transferred by directing a share issue of approximately 2.2 million euros to its parent company and by taking approximately 2.1 million euro loan from its parent company. Savcor will also propose to the Board of Directors of Cencorp that the enterprise value (EV) of Savcor Alfa Ltd (including also the businesses to be transferred from Photonium Ltd and Akseli Lahtinen Ltd) in the Transaction would be 7.5 million euros. The interest-bearing net debts of Savcor Alfa by the completion of the Transaction Ltd are estimated to be 4.2 million euros as a result of which the purchase price for the shares of Savcor Alfa Ltd (including the businesses to be transferred from Photonium Ltd and Akseli Lahtinen Ltd) would be approximately 3.3 million euros. It is proposed that Cencorp would pay the purchase price for the shares of Savcor Alfa Ltd either (i) entirely in cash; or (ii) 2.5 million euros of the purchase price in cash and 0.8 euros by the issuing of at most 10,000,000 new shares of Cencorp for a subscription price of 0.08 euros per share by virtue of the existing share issue authorization given to the Board of Directors. As to the cash component of the purchase price Cencorp would become indebted to Savcor Face Group Ltd as from the closing of the transactions. The new Board of Directors of Cencorp to be elected at the shareholders' meeting is expected to properly clarify before the acquisition of Savcor Alfa Ltd (and as part of it the businesses of Photonium Ltd and Akseli Lahtinen Ltd) the fairness of the transaction for all shareholders of Cencorp and to obtain necessary expert opinions and a so called fairness opinion concerning the said arrangement. 3. TENDER OFFER Provided that the shareholders' meeting of Cencorp has made the decisions required by the Conditional Financing Arrangement and the parties have agreed on the completion of the Transaction described in section 2 above, Savcor makes a decision on the Tender Offer in accordance with Chapter 6 of the Securities Markets Act for all the shares and option rights in Cencorp. The completion of the Tender Offer is conditional upon, among others, the completion of the Conditional Financing Arrangement and the Transaction. The consideration for the shares in Cencorp in the Tender Offer would be 0.08 euro per share. Jokela has undertaken not to sell his shares in the Tender Offer. SP for its part has given an undertaking according to which it will accept the Tender Offer concerning all the shares of Cencorp owned by it. According to Savcor's estimate the Tender Offer can begin on January 2009 at the earliest. Savcor announces its decision concerning the Tender Offer as well as the main terms of the offer by way of stock exchange release without delay after the final decision. In connection with the completion of the Tender Offer SP subscribes for 44,594,041 new shares directed to it and sells the new shares of Cencorp it has obtained immediately to Savcor at 0.08 euros / share. Savcor can thus participate in the pre-emptive rights issue to be arranged after the completion of the Tender Offer also with these shares. Savcor's intention is to keep Cencorp in the stock exchange list also after the completion of the Tender Offer. Savcor's ownership in Cencorp is expected to be increased to over 60 but at most to 90 per cent of the shares and votes in Cencorp as a result of the Conditional Financing Arrangement, the Transaction and the Tender Offer. Savcor is thus not expected to have the right and obligation to redeem the shares of the minority shareholders of Cencorp as a result of the Conditional Financing Arrangement, the Transaction and the Tender Offer in accordance with Chapter 18 of the Companies Act. 4. EXEMPTION GRANTED BY THE FINANCIAL SUPERVISION AUTHORITY According to the decision of the Financial Supervision Authority, Savcor, Markku Jokela (and FT Capital Oy which is under his control in accordance with Chapter 1 Section 5 of the Securities Markets Act as well as Pirjo Jokela and Joni Jokela, jointly “Jokela”) and SP operate jointly in the above-described arrangement in order to exercise decisive control over Cencorp in a manner referred to in the Securities Markets Act. The Financial Supervision Authority has on 26 November 2008 granted Savcor, Jokela and SP an exemption from the obligation to launch a tender offer as set forth in Chapter 6 Section 10 of the Securities Markets Act which obligation the said parties would otherwise have when operating jointly as referred to above. A precondition for the granting of the exemptions by the Financial Supervision Authority to Savcor, Jokela and SP is that the said parties will not operate jointly in order to exercise decisive control over Cencorp in other ways than in connection with the afore-described arrangement. In addition, a precondition for the exemptions is that that in connection with the publication of the arrangement the said parties publish material and sufficient information on (i) the planned arrangement and its different phases; (ii) the reasons and effects of the arrangement; (iii) the parties' plans concerning Cencorp; (iv)the purchase prices of the business purchases of Photonium Ltd and Akseli Lahtinen Ltd and the purchase of Savcor Alfa Ltd; (v) the financing of different parts of the arrangement and their possible effects on the business activities and obligations of Cencorp at the completion of the arrangement; and (vi) the businesses, results and financial positions of Savcor Alfa Ltd, Photonium Ltd and Akseli Lahtinen Ltd. Furthermore, a precondition for the granting of exemptions is that also information concerning a prospectus in accordance with Chapter 2 of the Securities Markets Act is given in connection with the publication of the tender offer document. SAVCOR GROUP LTD Additional information: Hannu Savisalo Managing Director Savcor Group Ltd Telephone: + 358 50 2688 + 61 417 268070 Email: hannu.savisalo@savcor.com The SAVCOR GROUP is a global technology and industrial services corporation serving customers in the areas such as rehabilitation of industrial and civil assets, telecom and electronic industries as well as forest related industries. Savcor has its chief operations in Australia, China and Europe. Savcor employs more than 1700 people in 13 countries. Its subsidiary, Savcor Group Ltd is listed at the Australian Securities Exchange, ASX since 2007. DISTRIBUTION Helsinki Stock Exchange Main media Appendix 1 CENCORP PLC'S STOCK EXCHANGE RELEASE
SAVCOR GROUP LTD OY ANNOUNCES THAT IT CONSIDERS MAKING A VOLUNTARY TENDER OFFER FOR ALL THE SHARES AND OPTION RIGHTS IN CENCORP PLC AND PROPOSING A CORPORATE TRANSACTION TO THE COMPANY
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