29/10/2001 YUKOS Announces Rescue Plan For Kvaerner (YUKOS)
Moscow, 29 October 2001 - Yesterday YUKOS Oil Company and its advisors presented a rescue plan to the Board of Directors of Kvaerner ASA and its major bank creditors.
The proposal will provide Kvaerner with working capital for the next week pending completion of negotiations for the restructuring of debt and establishing a guarantee consortium for an equity rights issue.
YUKOS believes that a credible rescue plan must be of a magnitude sufficient to reestablish trust and confidence in Kvaerner for the long-term.
YUKOS confirms its previous financial commitments to Kvaerner and has in addition arranged for a pool of new investors to participate with up to USD 150 million in a guarantee consortium for a rights issue to shareholders.
Further, YUKOS will use its current share ownership to attract additional capital in support of the rescue plan. The rescue plan assumes a fair and equal treatment of all shareholders. YUKOS expects that other major shareholders who have previously committed themselves to supporting Kvaerner will participate in the planned guarantee consortium and subsequent rights issue.
The key elements in the proposed rescue plan are:
1. Establishment of a restructuring fund through which new investors arranged by YUKOS will participate with up to USD 150 million in a guarantee consortium. This guarantee is conditional on the successful completion of negotiations with creditors and other parties. YUKOS expects financial institutions and bondholders to contribute with a restructuring of USD 500 million through a combination of subordinated zero coupon convertible notes and debt forgiveness. In addition, YUKOS expects that the banks agree to a standstill and refinancing of other short-term debt in a three-year loan facility.
2. YUKOS will complete the purchase of the Hydrocarbon and Process Technology businesses for USD 100 million as previously announced. YUKOS are also willing to make this capital available as soon as practicable.
3. YUKOS will provide working capital on a day-to-day basis for a period of up to seven days in order that a realistic capital restructuring can be agreed. Such working capital represents partial payment for the acquisition of the Hydrocarbon and Process Technology businesses.
4. YUKOS has appointed ProCorp ASA as their exclusive representative in negotiations necessary to achieve a satisfactory long-term solution with creditors and shareholders within the next seven days. ProCorp will also monitor the use of working capital provided by YUKOS for this purpose.
5. YUKOS is prepared to implement the rescue plan with immediate effect so that Kvaerner can avoid bankruptcy.
YUKOS invites other shareholders and creditors to participate in the proposed rescue plan. Combined with the sale of certain other assets the rescue plan will reduce Kvaerner's debt burden to an acceptable level and provide the basis for a successful recovery.
YUKOS and its advisors will make every effort to obtain support for the rescue plan.