Componenta to sell its shareholding in Turkish company

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Componenta Corporation Stock Exchange Release 4 August 2017 at 13:00

Componenta has today signed an agreement to sell its shareholding in Componenta Dökümcülük Ticaret ve Sanayi A.S., amounting to 93.6% of the company’s shares and votes, to Döktaş Metal Sanayi ve Ticaret A.Ş. (“Componenta Turkey”) at a price corresponding to the nominal value of the shares. The purchaser is owned by the management of Componenta Turkey. The agreement covers all of the company’s iron, machine shop and aluminium business in Turkey. The transaction has no cash flow impact. Consolidation in accordance with IFRS of Componenta Turkey as part of Componenta Group ended on 31 December 2016, as announced earlier.

Componenta Turkey, in its capacity as creditor, has today accepted the draft corporate restructuring programmes concerning Componenta Corporation and Componenta Finland Oy. The share transaction is expected to close in the coming weeks. It is a prerequisite for the completion of the share transaction that the Turkish club loan banks accept the transaction and discharge Componenta Corporation from all liabilities and obligations based on the club loan agreement, including the discharge from a loan guarantee of EUR 80 million. In addition, completion of the transaction requires that the draft restructuring programmes of Componenta Corporation and Componenta Finland Oy are confirmed and that the other terms and conditions of the transaction are fulfilled. Componenta Turkey will continue as casting supplier to Componenta Främmestad under the current terms and conditions.

“The only option for Componenta was to give up ownership of Componenta Turkey. The Turkish group is indebted and Componenta does not have the capabilities to finance its operations.

“Acceptance of the draft restructuring programmes for the Finnish group companies, which was agreed on in connection with the share transaction, is of considerable significance for the success of the restructuring programmes in the Helsinki district court and thus for the continuity of Componenta’s operations. The Componenta Turkey group is the largest creditor of Componenta Corporation and it would have been able on its own to prevent confirmation of the company’s restructuring programme if it had so wished.

“After the bankruptcy of the Componenta Wirsbo forging group, the sale of the shareholding in the Turkish company and possible confirmation of the restructuring programmes, Componenta will continue as a Finnish-Swedish casting group with a debt burden that has been adjusted to match its revenues and with genuine opportunities for developing its operations,” says Harri Suutari, CEO of Componenta Corporation.

The net sales of Componenta Dökümcülük Ticaret ve Sanayi A.S. in 2016 were roughly EUR 230 million and the company employs some 2,500 people. The company has an iron foundry and a machine shop in Orhangazi and an aluminium foundry and a wheel production unit in Manisa.

Componenta Group’s business operations comprise the foundry operations in Pori and Karkkila in Finland  and a machine shop in Främmestad in Sweden. Componenta Group employs some 660 employees in total.