Elcoteq continues with stabilising financial structure

At the same time Mr. Antti Piippo, BSc (Eng.), D.Sc. (Tech) h.c., and Mr. Henry Sjöman, BSc, the founder- shareholders of Elcoteq as well as Mr. Juha Toivola, MSc, an independent board member of Elcoteq have announced that they will not be available for re-election as Board Members. Mr. Jorma Vanhanen, MSc, the third founder-shareholder, and all other independent board members (President Martti Ahtisaari, Mr. Heikki Horstia, BSc, Mr. Eero Kasanen, DBA, Professor, Executive Dean, Aalto University School of Economics, and Mr. François Pauly, MBA, General Manager of Sal. Oppenheim jr. & Cie S.C.A) have announced their availability for re-election to the Board. In addition, the Board will be strengthened by two independent board members to be proposed to the Annual General Meeting. The Company continues to explore further ways to strengthen its balance sheet through equity and long-term financing arrangements. Furthermore, the Company will arrange a rights issue during 2010. The three founder shareholders have undertaken to support such balance sheet strengthening arrangements in shareholders' meetings. EUR 100 million revolving credit facility Elcoteq and the lenders of its EUR 100 million revolving credit facility have agreed on extending the facility from April 30, 2010 until June 30, 2011. The agreed facility will be amortized by EUR 33 million by March 31, 2011. The parties have signed a committed term sheet for the extended facility and aim at finalizing the loan documentation during April 2010. At the balance sheet date of December 31, 2009, EUR 100 million of the facility was in use. At the same time the Company had EUR 87 million in cash. The extension of the revolving credit facility is an important step in the overall financial stabilization of the Company. As communicated earlier, the Company issued hybrid securities of an aggregate nominal amount of EUR 29 million on January 27, 2010 and used the proceeds of the hybrid securities to redeem in an aggregate nominal amount of EUR 105 million of debenture bonds at 25% of their nominal value. Had these actions taken place in December 2009, the Company's solvency would have been 23.7% and gearing 0.7 on December 31, 2009. Further Strengthening of the Balance Sheet Elcoteq continues to focus on further strengthening its balance sheet through equity related transactions and long-term financing arrangements in 2010. The Company is currently preparing an exchange offer containing both hybrid loan and other equity linked instrument for the holders of its remaining outstanding debentures in an aggregate nominal amount of approximately EUR 35 million. Furthermore, the Company will arrange a rights issue during 2010.