LASSILA & TIKANOJA PLC STOCK EXCHANGE RELEASE 26 OCTOBER 2004 8:00 AM
LASSILA & TIKANOJA: RIGHTS OFFERING, ADDITIONAL DIVIDEND AND BONUS ISSUE
The Board of Directors of Lassila & Tikanoja plc proposes a rights offering, an additional dividend of EUR 1.00 and a bonus issue. The Company intends to use the proceeds raised to investments enabling profitable growth and to expansion of the Company’s operations outside Finland.
The Board of Directors of Lassila & Tikanoja plc has today decided to convene an Extraordinary General Meeting of Shareholders to handle the following matters:
PROPOSALS OF THE BOARD OF DIRECTORS TO THE GENERAL MEETING
Increase of the share capital by a rights offering
The Board of Directors proposes to the General Meeting that the share capital of the Company be increased in a rights offering based on the shareholders pre-emptive subscription right. The Company expects to raise a maximum of approximately EUR 47.5 million of new equity capital through the offering. In the offering, a shareholder is entitled to subscribe for two new shares for each five shares held at a subscription price of EUR 7.50. The Board of Directors proposes that the subscription period commence on 23 November and end on 15 December 2004. The record date of the offering is proposed to be 18 November 2004. The proposed maximum number of the shares to be issued in the offering is 6,331,524. Nordea Corporate Finance is acting as the Lead Manager in the offering.
Also those shares which have been subscribed for on the basis of stock options 2002A of Lassila & Tikanoja plc’s stock option plan 2002 and which, on the record date of the offering, have been entered in the Company’s shareholder register, entitle to receive subscription rights in the offering. Provided that all stock options 2002A have been used for subscription for shares, a maximum of 6,382,524 shares may be issued in the offering. The shares subscribed for in the offering entitle neither to the bonus issue nor to the additional dividend proposed by the Board of Directors.
Additional dividend
The Board of Directors proposes to the General Meeting that, in addition to the divided approved by the Annual General Meeting of Shareholders held on 18 March 2004, an additional dividend of EUR 1.00 per share be paid on the basis of the confirmed balance sheet for the financial year that ended on 31 December 2003. The Board of Directors states that the proposed divided does not mean any change in the dividend policy of the Company published by the Board of Directors but the nature of the proposed additional dividend is non-recurring. According to the proposal the record date of the divided would be 18 November 2004 and the date of the dividend payment 25 November 2004.
Bonus issue
The Board of Directors proposes to the General Meeting that the Company’s share capital be increased by a bonus issue so that each share will entitle its holder to receive one new share without payment. According to the proposal the record date of the bonus issue would be 18 November 2004 and the new shares would be entered in the book-entry accounts on 19 November 2004. The proposed maximum number of the shares to be issued in the bonus issue is 15,828,808.
Also those shares which have been subscribed for on the basis of stock options 2002A of Lassila & Tikanoja plc’s stock option plan 2002 and which, on the record date of the bonus issue, have been entered in the Company’s shareholder register, entitle to the bonus issue. Provided that all stock options 2002A have been used for subscription for shares, a maximum of 15,956,308 shares may be issued in the bonus issue. The shares issued in the bonus issue entitle neither to participate in the proposed rights offering nor to the proposed additional dividend. The purpose of the bonus issue is to improve the liquidity of the shares of Lassila & Tikanoja.
Amendment of Article 3 of the Articles of Association and amendment of the terms and conditions of stock options
The Board of Directors proposes to the General Meeting an amendment to the minimum and maximum share capital and the minimum and maximum amounts of shares of the Company stipulated in the Article 3 of the Articles of Association and, furthermore, an amendment to clause II,5 of Lassila & Tikanoja plc’s stock option plan 2002 to the effect that the shares subscribed for on the basis of the stock options will entitle their holder to dividends and other rights conferred by the shares after the increase of the share capital has been registered in the Trade Register.
BACKGROUND TO THE OFFERING
In Finland, Lassila & Tikanoja is the leading company in the environmental services, the second largest company in property services and the leading company in nearly all business lines within industrial services. The markets that the Company operates in are growing and especially the Environmental Services Division is going through a phase of strong development caused by the tightening requirements set by environmental legislation and by the general improvement of environmental awareness. In addition, the growth in the maintenance services for various properties and industrial plants is expected to remain strong as companies and other customer groups increasingly outsource these operations. The target of Lassila & Tikanoja is to grow in its fields of operations in Finland clearly faster than the markets in general and, furthermore, to expand its operations elsewhere in the Baltic Sea region, especially in the Baltic countries and in selected areas in Russia.
Both organic growth and acquisitions are necessary in order to meet the targeted growth. In order to boost organic growth, the company is planning substantial investments, including inputs in new recycling plants and product development.
In addition, Lassila & Tikanoja aims at putting increasing emphasis on its activities abroad and intends to multiply the net sales outside Finland within the next five years. To achieve this, it is necessary to strengthen the Company’s business organisation. Lassila & Tikanoja is seeking growth abroad mainly through acquisitions and by establishing business units especially in waste management and recycling services, property maintenance and cleaning services as well as hazardous waste services.
In accordance with its strategy, Lassila & Tikanoja intends to use the proceeds raised in the proposed offering to investments enabling profitable growth and to expansion of the Company’s operations outside Finland. Significant part of these investments is expected to take place during the next two years and they will, to some extent, burden Lassila & Tikanoja’s result in the short term. Investments will focus on plants producing secondary raw materials and recycled fuel of the collected waste materials for industrial customers. Majority of the plant investments will be made in Finland, but Lassila & Tikanoja intends to construct the first plant in the Baltic area already in 2005. The Company intends to start business operations in Russia in the beginning of year 2005. Expansion of the operations outside Finland is considered to secure the possibilities of Lassila & Tikanoja to achieve long-term profitable growth.
EFFECTS OF THE ARRANGEMENTS ON THE STOCK OPTIONS ISSUED BY LASSILA & TIKANOJA
Provided that the General Meeting of Lassila & Tikanoja approves the arrangements proposed by the Board of Directors, there will be certain changes on the terms and conditions of the stock options issued under the Company’s stock option plan 2002, that will enter into effect after the General Meeting.
The stock options do not entitle to subscribe for shares in the offering. Provided that the General Meeting approves the proposed offering, the Board of Directors will decide, in accordance with the terms and conditions of the stock options, on the amendment of the subscription price and/or the number of the shares that can be subscribed for pursuant to the exercise of such stock options in a manner that safeguards equal treatment of the holders of stock options and shareholders.
According to the terms and conditions of the stock options, the share subscription price will be reduced by a certain portion of the dividends paid. Provided that the General Meeting approves the proposed additional dividend, such dividend will fully decrease the share subscription price based on the stock options.
Provided that the General Meeting approves the proposed bonus issue, the share subscription price and number of the shares that can be subscribed for pursuant to the exercise of stock options will be amended in accordance with the terms and conditions of the stock options so that the share subscription price will be divided by two and the number of shares subscribed will be doubled.
The subscription period of the stock options 2002A issued under the stock option plan commenced on 2 May 2004 and the trading of the stock options on the main list of Helsinki Stock Exchange commenced 3 May 2004. Lassila & Tikanoja will separately announce the changes caused by the arrangements proposed to the General Meeting to the terms and conditions of such stock options at a later stage.
Due to the arrangements proposed by the Board of Directors, Lassila & Tikanoja has decided to change the previously announced schedule of trade registration of the shares subscribed for pursuant to the stock options. If a holder of stock options wishes to make a share subscription so that the subscribed shares entitle to the proposed additional dividend and enable participating in the proposed bonus issue and rights offering, the share subscription shall take place on 10 November 2004, at the latest. Shares subscribed by this time will be registered in the Trade Register on 17 November 2004 and entered in the subscriber’s book-entry account on 18 November 2004.
The Board of Directors of Lassila & Tikanoja will approve share subscriptions made pursuant to the stock options next time in the meeting handling the approval of the annual accounts for year 2004. The subscription schedule will be disclosed at a later stage.
Helsinki, 25 October 2004
LASSILA & TIKANOJA PLC
Board of Directors
For additional information please contact Jari Sarjo,
President and CEO, tel. +358 10 636 2810.
APPENDIX
INVITATION TO THE EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS
The shareholders of Lassila & Tikanoja plc are invited to attend the Extraordinary General Meeting of Shareholders, which will be held on Monday, 15 November 2004 at 4 pm in Kansallissali, Aleksanterinkatu 44, Helsinki.
The following matters will be handled at the meeting:
1. Proposal of the Board of Directors concerning an additional dividend
The Board of Directors proposes that in addition to the dividend approved by the Annual General Meeting of Shareholders held on 18 March 2004, an additional dividend of EUR 1.00 per share be paid on the basis of the confirmed balance sheet for the financial year that ended on 31 December 2003.
The Board of Directors states that the proposed dividend does not mean any change in the dividend policy of the company published by the Board. The nature of the proposed additional dividend is non-recurring. The proposed dividend will reduce the share subscription prices of Lassila & Tikanoja plc’s 2002 stock option plan in accordance with its terms and conditions.
Provided that the General Meeting of Shareholders approves the proposal of the Board of Directors concerning the additional dividend, the dividend will be paid to a shareholder registered in the company’s shareholder register maintained by the Finnish Central Securities Depository Ltd on the record date 18 November 2004. The dividend will be paid on 25 November 2004.
To the shareholders whose shares have not been transferred to the book-entry system by the record date of the additional dividend, the dividend will be paid only after the shares have been transferred to the book-entry system.
The entering into effect of the resolution concerning the additional dividend is conditional upon that the General Meeting of Shareholders will approve the proposal of the Board of Directors to increase the share capital by a rights offering in accordance with the clause 4 of this invitation.
2. Proposal by the Board of Directors concerning a bonus issue
The Board of Directors proposes that the company’s share capital be increased by a bonus issue of EUR 7,914,404 from EUR 7,914,404 to EUR 15,828,808 according to the following terms and conditions:
1. In the bonus issue, each share will entitle its holder to receive one (1) new share, without payment.
15,828,808 new shares will be issued. The book counter value of a share is EUR 0.50. An amount equalling the increase of the share capital will be added to the share capital by transferring EUR 7,564,577,25 from the share premium account and EUR 349,826.75 from the retained earnings.
2. The record date of the bonus issue is 18 November 2004. Shareholders who are entered in the company’s shareholder register on the record date shall have the right to the new bonus shares.
3. The bonus issue will be carried out in the book-entry system and no actions are required from the shareholders. The bonus issue will not cause proportional changes in the holding of the company’s shares or votes.
4. The new bonus shares will be entered in the shareholders’ book-entry accounts on 19 November 2004 provided that the increase of the share capital has been registered in the Trade Register.
5. The new bonus shares will entitle their holders to full dividends and other rights in the company conferred by the shares after the increase of the share capital has been registered in the Trade Register. The new bonus shares will not entitle to the additional dividend in accordance with the clause 1 of this invitation or subscription for shares in the rights offering in accordance with the clause 4 .
6. Shareholder who has not entered his shares in the book-entry system willl be entitled to the new bonus shares only after the registration of his shares in the book-entry system has been made.
7. The terms and conditions of Lassila & Tikanoja plc’s 2002 stock option plan will be amended in such a way that the proportional share of the shares which can be subscribed for on the basis of the stock options will remain unchanged.
8. The Board of Directors proposes the bonus issue for doubling the amount of the shares of the company. The increase of the share amount will improve the liquidity of the shares on the stock market and promote the trading.
9. Also those shares which have been subscribed for on the basis of stock options 2002A of Lassila & Tikanoja plc's stock option plan 2002 and which, on the record date of the bonus issue, 18 November 2004 have been entered in the company's shareholder register, entitle to the bonus issue. Each share subscribed for on the basis of the stock options entitles its holder to one new bonus share. Provided that all stock options 2002A have been used for subscription for shares, the share capital of the company may be increased in the bonus issue at most by EUR 7,978,154.
3. Proposal of the Board of Directors to amend Article 3 of the Articles of Association
The Board of Directors proposes an amendment of the current Article 3 of the Articles of Association to the effect that:
1. The minimum share capital of the company shall be EUR ten million (10,000,000) and the maximum share capital EUR fifty million (50,000,000), within which limits the share capital may be increased or decreased without amendment of the Articles of Association and
2. The company shall have a minimum of twenty million (20,000,000) and a maximum of hundred million (100,000,000) shares, within which limits the amount of shares may be increased or decreased without an amendment of the Articles of Association.
4. Proposal of the Board of Directors to increase the share capital by a rights offering
The Board of Directors proposes that the share capital of the company be increased in a rights offering on the following terms and conditions:
1. The share capital will be increased by a rights offering at most by EUR 3,165,762 by offering the shareholders for subscription the maximum of 6,331,534 shares. The book counter value of a share is EUR 0.50.
2. The shares will be offered for subscription to the shareholders of the company in proportion to the their shareholding.
A shareholder who is registered in the company's shareholder register maintained by the Finnish Central Security Depository Ltd on the record date of 18 November 2004 will receive one (1) freely transferable subscription right as a book-entry for every share owned in the company on the record date.
A shareholder, or someone to whom such shareholder's subscription rights have been transferred is entitled to subscribe for two (2) new shares for every five (5) subscription rights. No fractions of shares can be subscribed for.
A shareholder may participate in the rights offering by subscribing for shares pursuant to the subscription rights entered in such shareholder's book-entry account and by paying the subscription price. In order to participate in the rights offering a shareholder must submit a subscription assignment in accordance with the instructions given by such shareholder's own custodian or account operator. Any exercise of the subscription right is irrevocable and may not be modified or cancelled.
Also those shares which have been subscribed for on the basis of stock options 2002A of Lassila & Tikanoja plc's stock option plan 2002 and which, on the record date of the rights offering, 18 November 2004 have been entered in the company's shareholder register, entitle to the rights offering. Each share subscribed for on the basis of the stock options entitles its holder to one subscription right. Provided that all options 2002 have been used for subscription for shares, the share capital of the company may be increased in the rights offering at most by EUR 3,191,262.
3. The subscription period will commence on 23 November 2004 and expire at 6:00 p.m. Finnish time on 15 December 2004.
The shares not subscribed for pursuant to the subscription rights will not be offered for secondary subscription. Any subscription rights not exercised during the subscription period will expire without any compensation.
4. The share subscription price is EUR 7.50 per share. In the determination of the share subscription price a discount according to market practice has been taken into account in relation to the expected market price after the estimated effect of the additional dividend and bonus issue proposed to the General Meeting of Shareholders.
The subscription price of the share subscribed for shall be paid in full at the time of submitting the subscription assignment in accordance with the instructions given at the places of subscription or by the relevant custodian or account operator.
5. The new shares subscribed for in the rights offering will entitle their holders to full dividends and other rights in the company conferred by the shares after the increase of the share capital of the company has been registered in the Trade Register. The new shares will not entitle to the addional dividend in accordance with clause 1 of this invitation nor the bonus issue in accordance with clause 2.
In the event that the General Meeting of Shareholders approves the proposal of the Board of Directors on the bonus issue in accordance with the clause 2 of this invitation, the new shares to be issued in the bonus issue will not entitle to the share subscription in the rights offering.
6. The entering into effect of the resolution concerning the rights offering is conditional upon that the General Meeting of Shareholders has approved the proposal of the Board of Directors on the bonus issue in accordance with clause 2 of this invitation.
5. Proposal of the Board of Directors to amend the terms and conditions of stock options
The Board of Directors proposes to amend clause II,5 of Lassila & Tikanoja plc’s stock option plan 2002 to the effect that the shares subscribed for on the basis of the stock options will entitle their holders to dividends and other rights conferred by the shares after the increase of the share capital has been registered in the Trade Register.
Right to attend the meeting and notification
Shareholders who were entered in the company’s shareholder register maintained by the Finnish Central Securities Depository Ltd on 5 November 2004 are entitled to attend the Extraordinary General Meeting of Shareholders.
Shareholders whose shares have not been transferred to the book-entry system are also entitled to attend the General Meeting of Shareholders provided that they were registered in the share register of Lassila & Tikanoja plc demerged on 30 September 2001 (business ID 0110679-8) before 1 November 1993. In such cases, shareholders must present their share certificates at the General Meeting of Shareholders or otherwise demonstrate that title to the shares has not been transferred to the book-entry account.
Shareholders who wish to attend the General Meeting of Shareholders shall notify the company not later than 9 November 2004 at 4 pm by writing to the following address: Lassila & Tikanoja plc, P.O. Box 28, 00441 Helsinki, by fax to +358 10 636 2899, by telephone to +358 10 636 2882 or by e-mail to the address taru.maatta@lassila-tikanoja.fi. Possible powers of attorneys are asked to be delivered by the end of the notification period to the address mentioned above.
Documents for the meeting
The proposals of the Board of Directors with appendices will be available for shareholders from 8 November 2004 at the head office of the company, address: Hopeatie 2, Helsinki. Copies of the documents will be sent to shareholders upon request.
Helsinki, 25 October 2004
LASSILA & TIKANOJA PLC
Board of Directors
This stock exchange release is not an offer or solicitation to purchase or to subscribe for shares of Lassila & Tikanoja plc in any such jurisdiction where an offer or solicitation to purchase or to subscribe for shares would require registration or authority approval.
This stock exchange release must not be released or distributed in the United States. The shares of Lassila & Tikanoja plc have not been nor will they be registered under the United States Securities Act of 1933 and they may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.