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© Elcoteq Electronics Production | June 30, 2011

Elcoteq signs term sheet with Platinum Equity

Elcoteq has signed a conditional, non-binding Term Sheet with Platinum Equity, a Los Angeles, California based private equity firm (Platinum), with the aim of restructuring it's debt and stabilizing the balance sheet by providing additional equity and debt funding.
The intended transaction, if consummated, would significantly strengthen Elcoteq's financial position.

Elcoteq and Platinum have signed a Term Sheet concerning a major equity and debt investment. As an equity investment Platinum would subscribe new shares and warrants to be issued by Elcoteq. Elcoteq and Platinum are also negotiating about further debt financing amounting to up to 80 million euros.

Platinum's investment is dependent on, among other things, Elcoteq's current revolving credit facility lenders and the Elcoteq's other main lenders agreeing on restructuring of current debt. The number of shares to be issued to Platinum will be determined after the negotiations with the company's current lenders have been completed, aiming at Platinum becoming the biggest single shareholder of Elcoteq with a minimum ownership below the mandatory bid threshold under the laws of Luxembourg (33 1/3 percent). If Platinum were to later subscribe for shares with the warrants it is expected that the fully diluted ownership of Platinum would be substantially higher.

The signing of the definitive agreement is subject to, among other things, successful debt restructuring and completion of a due diligence process intended to be completed within approximately 30 days. The closing of the transaction will be subject to all the requisite and applicable regulatory, statutory and corporate approvals of both Platinum and Elcoteq.

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