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The Board of Aspocomp Group Oyj has today resolved to acquire the 49 percent minority interest in ACP Electronics Ltd, the Aspocomp's <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Suzhou, China based joint venture, from the Group's Taiwanese partner Chin-Poon Holdings. The net purchase price is EUR 37.8 million. The acquisition agreements will be signed on March 16, 2007 and according to estimates, the acquisition will be finalized in March. It will have an immediate positive impact on Aspocomp's financial result. The gross transaction price of EUR 44.6 million will be reduced by Chin-Poon's equipment purchase from ACP Electronics, valued at EUR 6.8 million. Since the equipment is not suitable for HDI technology production, Aspocomp is unable to use it. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
The transaction is planned to be financed with a EUR 40 million market-based loan granted by Standard Chartered Bank Hongkong. As part of the financing arrangement and based on the authorization granted by the Extraordinary General Meeting on January 19, 2007, Aspocomp will issue4 million warrants that entitle the bank to subscribe for a maximum of 4 million shares in Aspocomp. The exercise price of the warrants will correspond to the market price of Aspocomp shares at the time of the transaction. The company will issue a separate bulletin on thefinancial arrangements and warrants terms.
"Acquisition of the entire share capital of ACP Electronics allows Aspocomp to fully benefit from the plant's profitability and cash flow and enables us to serve our global customers more efficiently. Our aim is to increase the demanding technology HDI printed circuit board (PCB) production capacity in China. Therefore, we plan to upgrade the plant facility that will be vacated by Chin-Poon into a HDI PCB plant during 2008", says CEO Maija-Liisa Friman. The same premises also house another plant that started HDI PCB production already in 2001. The plant's production capacity has since been tripled to 40 million PCBs per year. The total added HDI PCB capacity of ACP Electronics is estimated to amount to about 78 million units in 2008.
As another part of the company's investment program, Aspocomp continues building its new HDI PCB plant in Chennai, India. According to new estimates, the investment will amount to about EUR 100 million, of which about EUR 80 million is earmarked for building and machinery and EUR 20 million for working capital, interest and start-up costs.
Planning, process definitions and bidding contests for the building and machinery of the plant in India have been concluded and the authority approvals required for plant construction have been granted. The project is expected to be delayed by a few months due to longer than expected authority approval processes and planning of the facility and its waste treatment phases. Trial production is therefore anticipated to start in early 2008 and full production in the first half of 2008.
Aspocomp also considers strengthening its equity in the near future by launching a rights issue ranging from EUR 20 to 25 million. The company published a related bulletin on February 15, 2007.
Aspocomp is currently negotiating for long-term loans to partly finance the investment in India. The duration of the negotiations cannot currently be estimated and the company cannot guarantee that they will result in an agreement.
The total investments in China and India after the acquisition of the minority interest in ACP Electronics are estimated at about EUR 130 million. The investments are a vital part of Aspocomp's aggressive growth strategy. The company focuses increasingly on technologically more demanding HDI PCBs and seeks growth by escalating investments particularly in Asia, the fastest growing HDI PCB market.
For further information, please contact Maija-Liisa Friman, CEO, tel. +358 9 7597 0711.
ASPOCOMP GROUP OYJ
President and CEO
Aspocomp: Innovative interconnection solutions for the electronics industry
The Aspocomp Group offers and develops innovative interconnection solutions for the electronics industry in close cooperation with its customers. We are strongly positioned as a supplier of mobile data terminal equipment components and aim to further bolster our position as a supplier to the automotive industry and data communications networks. We offer our global customers a fast road to mass production through flexible and cost-effective adaptation of new technologies.
The Aspocomp Group's production facilities are located close to its customers in Finland, China, and Thailand. In 2006, the Group's netsales stood at EUR 149 million and it had about 3,350 employees.