UPM-Kymmene launches Rauma offering, reducing holding to around 35%

UPM-Kymmene Corporation today announces the launch of an offering of Rauma shares to both domestic and international investors. The offering comprises 10.5 million shares, plus a greenshoe of a further 1.575 million shares. In addition, there will be a Finnish retail offering of 300,000 shares. UPM-Kymmene will also tender to Rauma for redemption 1 million shares at the secondary offering price.
In addition to this secondary offer, UPM-Kymmene has, as announced previously, distributed Rauma shares to its shareholders today through a special dividend, reducing UPM-Kymmene's stake from 73.3% to 59.9%. As a result of the offering, assuming the greenshoe is exercised, and the buy back, UPM-Kymmene's longer term objective to retain a significant but minority shareholding in Rauma and focus on its core pulp and paper business.
Both UPM-Kymmene and Rauma have agreed that they will not, after the proposed transaction, issue or sell further shares in the company for a period until the end of 1998 and the end of 1997 respectively, without the prior consent of the global co-ordinator.
This offering will broaden the ownership base of Rauma and enlarge the publicly traded float. The shares are listed in Helsinki and New York.
SBC Warburg is global co-ordinator and the offering will be structured as a single global tranche.
The offering is expected to be priced in late May, following a series of presentations to investors in Finland, other Nordic countries, the UK, continental Europe, the US and South East Asia. The subscription period for the retail offering will run from 15 to 26 May. The price of the retail offering will be the same as the price set for the institutional offering.
Rauma market capitalisation at the close of 5th May was FIM 5.8 billion. Rauma Corporation is one of Finland's largest metal and engineering companies, employing more than 10,000 professionals worldwide. Net sales for 1996 were FIM 10.2 billion, a third of which came from Europe, a third from North America and the remainder from the rest of the world. In particular, the Asia Pacific region has become an important market for the group.
Rauma Corporation comprises four business groups: Timberjack (a forest machine manufacturer), Sunds Defibrator (fiber technology equipment and process supplier), Nordberg (crushing equipment manufacturer) and Neles Jamesbury (industrial valves manufacturer).
For further information: Mr Kari Toikka, VP, Investor Relations, tel. 358 204 15 0014.