Rottneros carries out new share issue of SEK 225 million ($32.4 million)

Oct 14, 2009. /Lesprom Network/. Rottneros' new share issue of SEK 225 million ($32.4 million) has preferential rights for Rottneros' shareholders. The company has received commitments from its largest shareholders and other external underwriters, which means that the issue is fully underwritten, the company said. Additionally, SEK 200 million ($29 million) of Rottneros' debt is converted into new shares through a debt conversion by Rottneros' banking syndicate. "The new share issue will provide the company with the financial resources necessary to carry out interesting, strategic and profitability-enhancing investments over the next few years, while significantly reducing financial risks," says Rune Ingvarsson, Chairman of the board. He further explains that the proposed relatively large underwriting discount should be viewed in light of the company's weak earnings to date and the need to unite banks, underwriters and shareholders in a solution that jointly supports the company's financial reconstruction. "Through the operational and financial restructuring, including the new share issue, the company's net debt will become essentially zero, compared with the net debt of almost SEK 750 million ($108 million) at the beginning of the year," explains Ole Terland, CEO of Rottneros. "At the same time we are laying a strong financial foundation for the future Rottneros that focuses on profitable production of long-fiber pulp in the Nordic countries and, if the South Africa project performs well, a competitive short-fiber pulp, Terland adds. The formal decision regarding the new share issue and the debt conversion is expected at an extraordinary general meeting on 11 November.