UPM-Kymmene Corporation (Kymmene Corporation) convertible bond loan 1993

THE COMPANY WILL EXERCISE ITS REDEMPTION RIGHT ON 15 APRIL, 1998. THE PERIOD FOR CONVERSION INTO SHARES WILL END ON 1 APRIL, 1998
Kymmene Corporation issued a 750 million Finnish markka convertible bond in 1993, of which 603,090,000 Finnish markka have not been converted into shares. Under section 7 of the terms and conditions of the issue, the company has the right to redeem the bonds at par and any interest due, when the average daily price of a share of UPM-Kymmene common stock on the Helsinki Stock Exchange has exceeded the conversion price Finnish markka 97.37, by 40 per cent during 20 of 30 consecutive trading days or has reached or been above the level of Finnish markka 136.32.
As the above proviso regarding share price and the conditions of the first paragraph of section 7 have been met, UPM-Kymmene hereby notifies that the bonds will be redeemed and the redemption date is 15 April, 1998. The company will redeem the bonds at par and interest due at selected Merita Bank branches against the surrender of the bonds starting on the redemption date on condition that the weighted average price of the share on the trading day preceding the date of redemption or on 14 April, 1998 is Finnish markka 136.32 at the minimum. No interest shall accumulate on the principal amount of the bond after 15 April, 1998.
If bondholders wish to exercise their right of conversion, they must request conversion no later than 14 days prior to the redemption date or on 1 April, 1998 at the latest. If conditions for redemption are not met, conversion will not take place, unless a bondholder requests conversion. If any bonds have not been surrendered for conversion as described above, bondholders will have the right of repayment of the principal of the loan including interest accrued until 15 April, 1998, providing that conditions for redemption are met.
For one convertible bond, nominal value 10,000 Finnish markka, bondholders receive 102.7 UPM-Kymmene Corporation shares. If upon conversion a bondholder is to receive a fraction of a share, he shall be paid a corresponding sum of cash to be determined based upon the closing price of a share of UPM-Kymmene common stock on the preceding trading day. When a bondholder converts several bonds into shares, fractions of a share shall be determined only from the total number of bonds converted.
The price of UPM-Kymmene share is at the moment considerably above the conversion price Finnish markka 97.37. We wish to bring this to bondholders´ attention before they decide on either conversion into shares or redemption of the bonds at par.
If all bondholders use their right of conversion, the number of shares increases by a maximum of 6,193,734 shares and share capital by a maximum of 61,937,340 Finnish markka. This would save UPM-Kymmene about 50 million Finnish markka annually in interest payment.