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PCB | February 15, 2007

Aspocomp plans to buy ACP Electronics

Aspocomp is currently negotiating with Chin-Poon Industrial Co., Ltd. in order to acquire 100 percent ownership in the companies' joint venture ACP Electronics Ltd. in China.
Based on the authorization of the Extraordinary General Meeting of January 19, 2007, and in order to finance part of its proposed investments in India and China, Aspocomp Group Oyj considers launching a rights issue in the near future, ranging from EUR 20 to 30 million. The issue would be based on the shareholders' pre-emptive subscription right. Aspocomp has appointed Evli Bank Plc, Corporate Finance as its financial advisor for the rights issue. To further finance the investments, the Aspocomp Group is currently in negotiations to raise long-term debt. The duration of the negotiations cannot currently be estimated and there can be no assurance that they will result in an agreement. Aspocomp is also considering further strengthening its equity later this year.

Aspocomp is aggressively pursuing its growth strategy by increasingly focusing on technologically more demanding HDI printed circuit boards (PCBs). The primary means to growth are further investments in Asia, the fastest growing HDI PCB market.

Consequently, Aspocomp is currently negotiating with Chin-Poon Industrial Co., Ltd. in order to acquire 100 percent ownership in the companies' joint venture ACP Electronics Ltd. in Suzhou, China. This would enable Aspocomp to fully benefit from ACP Electronics's profitability and cash flow and to increase the Group's HDI PCB production capacity in China. The management of Aspocomp is currently not in a position to estimate the duration of the negotiations and they may not necessarily result in an agreement. Aspocomp has issued a stock exchange release on November, 17, 2006, regarding the negotiations.

As another part of the company's investment program, Aspocomp continues building the new HDI PCB plant in Chennai, India. The plant, with its 22,400 m2 production area, would be India's first HDI PCB production facility. According to current estimates, the Chennai plant will start trial production towards the end of 2007 and full production in 2008.

Provided that Aspocomp moves forward with the investment projects, i.e. the minority acquisition and product capacity expansion related to the Chinese subsidiary as well as the India plant project, the total investment needed between 2006 and 2008 is currently estimated at about EUR 170 million. If Aspocomp succeeds in financing the projects in China and India, the positive effect on the company's net sales is expected to become visible starting 2008. The investments required for the expansion are estimated to result in a significant increase in the company's indebtness and markedly higher financing costs.

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