Kasola PLC Stock Exhange Release 10 December 2007
Not for release, publication or distribution, in whole or in part, in or into
the United States, Canada, Australia or Japan.
CERTAIN INFORMATION ON THE NURMINEN LOGISTICS BUSINESS TO BE TRANSFERRED TO
KASOLA PLC - CORRECTION IN THE FINANCIAL INFORMATION PUBLISHED PREVIOUSLY -
PROSPECTUS REGARDING NURMINEN LOGISTICS HAS BEEN APPROVED
In the main agreement signed by John Nurminen LLC (“John Nurminen”) and the
principal owners of Kasola PLC (“Company”) and in part by the Company, dated 7
September 2007, it has been agreed on overall arrangement (“Arrangement”) under
which the Company will act, among others, as the acquiring company in John
Nurminen's overall demerger so that John Nurminen's logistics business
(“Nurminen Logistics Business”) will be transferred to the Company and the
Company will give the shareholders of John Nurminen 9,999,989 Company's new
A-class shares as a demerger consideration (“Transaction”). Upon the completion
of the Transaction, approximately on 1 January 2008, the registered Company name
shall be changed to Nurminen Logistics PLC. The Company has published stock
exchange releases relating to the Arrangement and the Transaction on 7 September
2007, 20 September 2007, 28 September 2007, 1 October 2007, 5 October 2007, 8
October 2007, 9 October 2007, 22 November 2007, 29 November 2007 and 30 November
2007.
The Financial Supervision Authority approved the prospectus relating to the
Transaction on 7 December 2007 (register number 157/250/2007). The prospectus is
available as of from 12 October 2007 at 10:00 from OMX way at Fabianinkatu 14,
FI-00130 Helsinki, and in electronic form at the website
www.nurminenlogistics.com as well as at the Company head office at Lyhtytie 2,
00570 Helsinki, and after the Transaction has been concluded, as of 1 January
2008 by estimate, at the address Pasilankatu 2, FI-00240 Helsinki.
Prior to the approval of the prospectus, as well as tender offer document
regarding public tender offer made on the Company's shares by John Nurminen and
the principal owners of the Company, the Financial Supervision Authority has
requested the Panel on Takeovers and Mergers at The Central Chamber of Commerce
of Finland (“The Panel on Takeovers and Mergers”) to issue a statement whether
the actions relating to the Arrangement have been in compliance with the
requirement of shareholders equality under the Finnish Companies Act (Chapter 1,
Section 7).The Panel on Takeovers and Mergers has on 4 December 2007 issued a
statement to the Financial Supervision Authority where the Arrangement - and in
particular the combining of share classes at a ratio of 1:1,8 included in the
Arrangement - has been assessed. The Panel on Takeovers and Mergers finds in its
statement - when assessing the ratio used in combining of share classes - that
the Arrangement must be considered to be in Company's minority shareholders'
interest when assessing the Arrangement as a whole and in particular when taking
into account earlier price development of Company's shares, the price offered in
the public tender offer (EUR 5.00), the possibility of the shareholders to
remain shareholders also in new Nurminen Logistics with the same conditions as
the principal owners as well as the expectations relating to future price
development and liquidity of the Company's shares. As regards the compensation
for damages paid by John Nurminen to the principal owners, which information the
Company published on 22 November 2007 in stock exchange release, the Panel on
Takeovers and Mergers states that payment of such damages will not put the
Company's shareholders in unequal position which would be against the
requirement of shareholders equality under the Finnish Companies Act (Chapter 1,
Section 7).
Shareholders are urged to familiarize in detail with the prospectus and the
information included therein. The Company publishes by this stock exchange
release solely the following essential information relating to the Nurminen
Logistics Business, that will be transferred to the Company, that is described
in greater detail in the prospectus:
Nurminen Logistics Business (Appendix 1)
Business strategy (Appendix 2)
Financial objectives and future prospects (Appendix 3)
Corrected carve-out financial information for the period 1-9/2007, IFRS,
unaudited (Appendix 4)
The Company has on 22 November published by means of stock exchange release
carve-out unaudited financial information (IFRS) of Nurminen Logistics Business
for the three first quarters of 2007. The financial information included in the
prospectus contains certain changes to the financial information published on 22
November 2007. The changes are set forth in detail in Appendix 4.
KASOLA PLC
Tapani Väljä
Managing Director
Further information:
Tapani Väljä
Managing Director
Kasola PLC
0400 505 078
tapanivalja.kasola@kaso.fi
www.kasola.fi
DISTRIBUTION
Helsinki Stock Echange
Major media
APPENDIX 1
Nurminen Logistics Business
Nurminen Logistics offers and produces high quality logistics services in
Finland, the Baltic Sea region, Russia and other Commonwealth of Independent
States countries (“CIS”) that strengthen the competitiveness of the customers.
Nurminen Logistics shall be formed by transferring John Nurminen's Rail
Services, Cargo Handling and Value-Added Services, Customs Clearance Services,
Special and Heavy Transports and Health Care Logistics units, complemented with
the administrative units serving the above operations, to the Company upon
completion of the Transaction, estimated to take place on 1 January 2008.
The business segments of Nurminen Logistics for which financial reporting will
be prepared are the Nurminen Cargo business segment (“Nurminen Cargo”), the
Nurminen Heavy business segment (“Nurminen Heavy”) and Nurminen Care (“Nurminen
Care”), the care logistics business segment which offers, for example, medical
transport services.
Nurminen Cargo offers its client companies in Finland, Russia and other CIS
countries the transportation of finished products and raw materials, customs
clearance, forwarding, terminal and value-added services as well as services
connected with project exports.
Nurminen Heavy specialises in the transportation of oversized and heavy items
and in the provision of value-added services for them. Nurminen Heavy's area of
expertise is in demanding international special transport projects that require
special transport permits and specialised equipment. Such projects often
encompass several separate transports.
Nurminen Care's service selection mainly includes non-emergency patient
transport and emergency paramedic and medical transport services and stand-by
services. In addition to these, the unit's service offering includes a
round-the-clock emergency centre, patient transfers inside hospitals, emergency
stand-by for events, medical emergency phone alert services, the rehabilitation
of patients from hospitals and special group transport.
The following tables present the segment-by-segment distribution of the turnover
and operating profit of the Nurminen Logistics business during the period
1/2006-9/2007. This summary is based on carve-out financial statement
information carved-out from John Nurminen's consolidated financial statements.
--------------------------------------------------------------------------------
| Turnover by | 1 Jan-30 Sep, | 1 Jan-30 Sep, | 1 Jan-31 Dec, |
| business segment | 2007 | 2006 | 2006 |
| (1 000 EUR) | IFRS | IFRS | IFRS |
| | (unaudited) | (unaudited) | (audited) |
--------------------------------------------------------------------------------
| Cargo | 51 723 | 47 139 | 64 129 |
--------------------------------------------------------------------------------
| Heavy | 7 343 | 5 624 | 8 070 |
--------------------------------------------------------------------------------
| Care | 4 610 | 1 604 | 2 026 |
--------------------------------------------------------------------------------
| Eliminations | -2 183 | -1 564 | -2 020 |
--------------------------------------------------------------------------------
| Total | 61 493 | 52 803 | 72 205 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 1 Jan-30 Sep, | 1 Jan-30 Sep, | 1 Jan-31 Dec, |
| by business | 2007 | 2006 | 2006 |
| segment | IFRS | IFRS | IFRS |
| (1 000 EUR) | (unaudited) | (unaudited) | (audited) |
--------------------------------------------------------------------------------
| Cargo | 1 596 | 347 | 809 |
--------------------------------------------------------------------------------
| Heavy | 823 | 277 | 678 |
--------------------------------------------------------------------------------
| Care | 550 | 341 | 402 |
--------------------------------------------------------------------------------
| Other | 0 | 0 | 0 |
--------------------------------------------------------------------------------
| Total | 2 969 | 965 | 1 889 |
--------------------------------------------------------------------------------
APPENDIX 2
Business strategy
The aim for growth, innovativeness and the focus on the logistics business are
central aspects of Nurminen Logistics' strategy. The Nurminen Logistics Business
develops new services that are created on the basis of customer needs and are
used to create new competitive advantages for customers and the prerequisites
for the continued growth.
By expanding its operational network, Nurminen Logistics strengthens its current
market position and, at the same time, prepares for a more balanced flow of
goods and a change in its direction, with more goods being transported from
so-called developing markets to Western Europe. Below is a list of the main
aspects of Nurminen Logistics' strategy:
The Nurminen Logistics business will focus on producing and providing services
for the logistics sector in Finland, the Baltic Sea region, Russia and other CIS
countries.
The focus of growth will initially be on the Nurminen Cargo business segment,
where the objective is to achieve a leading market position in railway traffic
between Finland and CIS countries and a significant market position in logistics
outsourcing services, including cargo handling and export and import
documenting.
The Nurminen Heavy business segment's market share in transport to and inside
Russia will be increased.
In the Nurminen Care business segment, strong growth will be sought in current
and, potentially, new business sectors in the care industry.
Nurminen Logistics will grow both organically and through selected mergers and
acquisitions.
APPENDIX 3
Financial objectives
John Nurminen has informed the Company that, in the Nurminen Logistics Business,
the objective shall be to significantly increase its turnover through
investments and mergers and acquisitions as well as to achieve an annual return
on investment of at least 14 per cent.
Future Prospects
The Company published on 9 September 2007 the following estimate by John
Nurminen about the financial results of the Nurminen Logistics Business
transferred from John Nurminen to the Company: The yearly FAS bases turnover for
the transferred business was estimated at approximately 80 million euros, and
business profit at approximately 4 million euros in 2007.
According to the statement delivered by John Nurminen board to the Company, and
released by the Company on 22 November 2007, the carve-out IFRS format financial
information on the transferred business presented in the statement for the time
period ending on 30 September 2007 shows both the turnover and profit to be at
the predicted level presented in the Stock Exchange Release published on 9
September 2007. Because the estimated date of the Transaction's completion is 1
January 2008, the result of the Nurminen Logistics Business for the 2007
financial year will not be combined with the Company's 2007 financial
statements.
John Nurminen has stated in the statement delivered to the Company that the
objective of the transferred business is a significant increase in turnover over
the next few years through investments and corporate acquisitions.
Russian foreign trade is expected to grow rapidly in 2008-2009. The growth will
bring opportunities for expansion especially for the Nurminen Cargo segment, and
if Nurminen Logistics is able to maintain its strong market position, the
segment's outlook is promising. The entry of new players in the segment is
increasing competition, however. The unit is investing in additional capacity.
Cost increases especially in Russia require that procedures are improved
continually to maintain competitiveness.
The Nurminen Heavy segment's overall market conditions are favourable and are
expected to remain so. Major projects may not be completed in 2008, however,
which means that it is not certain that the 2007 performance level will be
maintained.
The market conditions in Nurminen Care's segment are expected to remain stable.
The development of its turnover and performance depends largely on its success
in public tenders. Moreover, changes are underway in the segment's salary
structure and the resulting increases cannot be transferred to prices in their
entirety in 2008.
APPENDIX 4
Carve-out financial information, IFRS, unaudited
The following carve-out unaudited financial information for the period 1-9/2007
(IFRS) on the Nurminen Logistics Business (consisting of the income statement
and the balance sheet) include certain changes with respect to the financial
information published on 22 November 2007. The changes in IFRS numbers relate to
change in accounting treatment of sale and leaseback arrangement of real estate
located in Mussalo in Kotka. In the financial information included in the
Company's stock exchange release on 22 November 2007 the above said sale and
leaseback arrangement was considered as financial lease which shall be entered
in the balance sheet. In the financial information included in the prospectus
the said leaseback arrangement has been considered as off-balance-sheet, so
called operating lease.
The most significant effects of the change in accounting treatment of sale and
leaseback arrangement to the balance sheet from the period ended on 30 September
2007 are as follows: the amount of property, plant and equipment has decreased
by EUR 5,672 thousand, the amount of non-current interest-bearing liabilities
has decreased by EUR 5,520 thousand, the amount of current interest-bearing
liabilities has decreased by EUR 332 thousand and the amount of net assets has
increased by EUR 141 thousand. The most significant effects to the income
statement from the period ended on 30 September 2007 are as follows: the mount
of depreciation has decreased by EUR 325 thousand, the amount of finance
expenses has decreased by EUR 190 thousand and the amount of other operating
expenses has increased by EUR 438 thousand. Information from comparative period,
ended on 30 September 2006, has been changed correspondingly.
The prospectus that was approved on 7 December 2007 includes more specific
financial information on Nurminen Logistics Business. The prospectus also
includes pro forma financial information on Nurminen Logistics Business.
--------------------------------------------------------------------------------
| CARVE OUT INTERIM FINANCIAL INFORMATION OF THE NURMINEN LOGISTICS BUSINESS |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED INTERIM | | | | |
| INCOME ACCOUNT, IFRS | | | | |
--------------------------------------------------------------------------------
| 1 000 EUR | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | unaudited | | unaudited | |
--------------------------------------------------------------------------------
| | 30 Sep 2007 | | 30 Sep 2007 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NET SALES | 61 492 | | 52 802 | |
--------------------------------------------------------------------------------
| Other operating income | 1 251 | | 16 | |
--------------------------------------------------------------------------------
| Materials and services | -31 773 | | -27 692 | |
--------------------------------------------------------------------------------
| Employee benefits | -13 456 | | -11 775 | |
| expense | | | | |
--------------------------------------------------------------------------------
| Depreciation, | -3 629 | | -2 188 | |
| amortisation and | | | | |
| impairment losses | | | | |
--------------------------------------------------------------------------------
| Other operating expenses | -10 916 | | -10 200 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| OPERATING PROFIT | 2 968 | | 964 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Finance income and | -1 387 | | -687 | |
| expenses | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 39 | | -31 | |
--------------------------------------------------------------------------------
| Share of profit of | |
| equity accounted invests | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| PROFIT BEFORE INCOME TAX | 1 620 | | 246 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Income tax expense | -329 | | -48 | |
--------------------------------------------------------------------------------
| PROFIT FOR THE PERIOD | 1 291 | | 198 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to | | | | |
--------------------------------------------------------------------------------
| Equity holders of | 1 224 | | 151 | |
| the parent company | | | | |
--------------------------------------------------------------------------------
| Minority interest | 66 | | 47 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CARVE OUT INTERIM FINANCIAL INFORMATION OF THE NURMINEN LOGISTICS BUSINESS |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED INTERIM | | | |
| BALANCE SHEET, IFRS | | | |
--------------------------------------------------------------------------------
| 1 000 EUR | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | unaudited | | unaudited |
--------------------------------------------------------------------------------
| | | 30 Sep 2007 | | 30 Sep 2007 |
--------------------------------------------------------------------------------
| ASSETS | | | |
--------------------------------------------------------------------------------
| Non-current assets | | | |
--------------------------------------------------------------------------------
| Property, plant and | 39 255 | | 29 415 |
| equipment | | | |
--------------------------------------------------------------------------------
| Goodwill | 10 452 | | 7 552 |
--------------------------------------------------------------------------------
| Other intangible assets | 2 483 | | 2 402 |
--------------------------------------------------------------------------------
| Investments in equity | 82 | | 554 |
| accounted investees | | | |
--------------------------------------------------------------------------------
| Receivables | 618 | | 49 |
--------------------------------------------------------------------------------
| Deferred tax assets | 309 | | 144 |
--------------------------------------------------------------------------------
| | | 53 199 | | 40 116 |
--------------------------------------------------------------------------------
| Current assets | | | |
--------------------------------------------------------------------------------
| Trade and other | 19 978 | | 11 819 |
| receivables | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 88 | | 96 |
--------------------------------------------------------------------------------
| | | 20 066 | | 11 915 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL ASSETS | 73 265 | | 52 031 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NET ASSETS AND LIABILITIES | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net assets | 21 695 | | 11 142 |
--------------------------------------------------------------------------------
| Minority interest | 1 307 | | 538 |
--------------------------------------------------------------------------------
| | | 23 002 | | 11 680 |
--------------------------------------------------------------------------------
| LIABILITIES | | | |
--------------------------------------------------------------------------------
| Non-current liabilities | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 1 288 | | 1 027 |
--------------------------------------------------------------------------------
| Non-interest bearing | 1 480 | | 1 389 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Interest-bearing | 21 552 | | 20 362 |
| liabilities | | | |
--------------------------------------------------------------------------------
| | | 24 320 | | 22 778 |
--------------------------------------------------------------------------------
| Current liabilities | | | |
--------------------------------------------------------------------------------
| Trade and other payables | 23 288 | | 10 674 |
--------------------------------------------------------------------------------
| Interest-bearing | 2 665 | | 6 899 |
| liabilities | | | |
--------------------------------------------------------------------------------
| | | 25 943 | | 17 573 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL LIABILITIES | 50 263 | | 40 351 |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| TOTAL NET ASSETS AND | 73 265 | | 52 031 |
| LIABILITIES | | | |
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CERTAIN INFORMATION ON THE NURMINEN LOGISTICS BUSINESS TO BE TRANSFERRED TO KASOLA PLC - CORRECTION IN THE FINANCIAL INFORMATION PUBLISHED PREVIOUSLY - PROSPECTUS REGARDING NURMINEN LOGISTICS HAS BEEN APPROVE
| Source: Nurminen Logistics Oyj