February, the 26th, 2008
Elcoteq Divests Its Subsidiary in St. Petersburg
As part of the previously announced action plan to restore the company's profitability and competitiveness, Elcoteq has signed an agreement with Flextronics International GmbH to divest Elcoteq's subsidiary ZAO Elcoteq, in St. Petersburg, Russia. The closing takes place when and provided that the conditions precedent including the competition authorities' approvals have been fulfilled. This is estimated to take approximately 60 days.
The transaction is a share deal, in which the purchaser acquires 100 percent of the shares in Elcoteq's subsidiary in St. Petersburg including the premises and personnel but excluding the existing customer agreements. Elcoteq expects to book a one-time gain of approximately 3 million euros related to the sale on Q2/2008. The deal is estimated to have a positive impact on the operative profitability from Q3/2008 onwards.
The size of the plant is 14,700 square meters. At the end of January 2008, the plant employed 550 people. The plant has mainly produced for the export markets.
St. Petersburg's plant has been loss-making due to the underutilization which has been partially caused by the unfavorable custom duties for component import.
"The divestment of the Russian subsidiary plays a central role in improving Elcoteq's profitability and balance sheet in 2008," says Mr. Jouni Hartikainen, President and CEO of Elcoteq SE.
Elcoteq SE is a leading electronics manufacturing services (EMS) company in the communications technology field. Elcoteq's global service offering covers the entire lifecycle of products, from product development to after-market services.
Elcoteq provides global end-to-end solutions consisting of product development services, supply chain management, NPI, manufacturing, and after-market services for the whole lifecycle of its customers' products. These products include Personal Communications products such as mobile phones and their parts, Home Communications products such as set-top boxes and electronics for flat screen TVs as well as Communications Networks products such as base-stations, tower-top amplifiers, and microwave systems.
Elcoteq operates in 15 countries on four continents and employs some 24,000 people. The Group's consolidated net sales for 2007 totaled 4.0 billion euros. Elcoteq SE is listed on the Helsinki Stock Exchange. For more information visit the Elcoteq website at HTUwww.elcoteq.comUTH.
SVP, Treasury and Investor Relations
Jouni Hartikainen, President and CEO, tel. +358 10 413 11
Mikko Puolakka, CFO, tel. +358 10 413 11, mobile +41 79 618 0302
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