Ericsson sets terms for rights offering
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Date: Friday, July 19 2002
- One A- or B-share entitles the holder to receive a right to
subscribe for one new B-share at SEK 3.80
- Total offering amounts to approximately SEK 30 billion
- Offering open to all shareholders of record date as of August 13,
2002
- Subscription and payment period runs from August 15 - September 3,
2002
- The rights issue is fully underwritten by shareholders and a
consortium of banks
Terms of the rights offering
Based on the authorization granted by the extraordinary meeting of
shareholders on June 6, 2002, the board of Ericsson has now set the
terms of the rights offering.
One share of series A or series B of Ericsson, held as of the record
date of August 13, 2002, carries the right to subscribe for one new
share of series B. The subscription price is SEK 3.80 per share.
Equivalent terms are offered to holders of the Nasdaq-traded ADSs.
Ericsson currently has 656,218,640 series A shares and 7,252,509,947
series B shares outstanding (excluding 156,775,980 treasury shares of
series B), which means that a maximum of 7,908,728,587 new series B
shares will be issued (assuming that no further convertibles are
converted or warrants are exercised prior to the record date).
Subscriptions will be possible on a non-preferential basis for shares
not taken up by shareholders exercising preferential rights.
Allocation preference will be given to subscriptions made by those
who have exercised their subscription rights. The offering will raise
approximately SEK 30 billion, before expenses.
Underwriting and subscription commitments
Due to the current negative sentiment in stock markets in general and
the telecom industry in particular, and in order to ensure the
success of the rights issue, the Board of Ericsson has decided to
have the rights issue fully underwritten.
Industrivärden and Investor, representing 7.4 percent of the share
capital and 66.7 percent of the votes, have together undertaken to
subscribe for SEK 8 billion of the rights issue.
In addition, Alecta, Skandia Life, Second National Pension Fund and
Third National Pension Fund, representing approximately 7.0 percent
of eligible shares have undertaken to subscribe for their respective
rights in the issue, corresponding to slightly more than an aggregate
of SEK 2 billion.
The remaining SEK 20 billion, is underwritten by a consortium of
banks, consisting of Morgan Stanley, SEB/Enskilda Securities, Goldman
Sachs International, Handelsbanken Securities and Schroder Salomon
Smith Barney.
The underwriting is subject to customary returns and conditions.
Timetable
Ericsson estimates that the rights offering will follow the below
timetable:
August 9
Ericsson's series A and series B shares will be traded exclusive of
the right to participate in the offering.
August 13
Record date for participation in the rights offering, i.e.
shareholders and ADS holders registered as owners on this day will
obtain B share rights or ADS rights, as applicable, to participate in
the offering.
August 15
First day for subscription and payment for B shares and ADSs. First
day for trading in B share rights and ADS rights.
August 27
Last day for trading in ADS rights, as well as the last day for
subscription and payment for ADSs.
August 29
Last day for trading in B share rights.
September 3
Last day for subscription and payment for B shares.
On or about Sep. 6
Announcement of preliminary rights offering results.
Offering documentation will be sent to shareholders and ADS holders
registered as owners as of the record date around the time of the
start of the subscription period.
Advisors
Morgan Stanley, Enskilda Securities, Goldman Sachs International,
Handelsbanken Securities and Schroder Salomon Smith Barney are
financial advisors to Ericsson for the rights offering.
FOR FURTHER INFORMATION, PLEASE CONTACT
Henry Sténson, Senior Vice President, Corporate Communications
Phone: +46 8 719 4044
E-mail: henry.stenson@lme.ericsson.se
Investors
Gary Pinkham, Vice President, Investor Relations
Phone: +46 8 719 0858, +46 730 371 371
E-mail: investorrelations@ericsson.com
Maria Bernström, Director, Investor Relations
Phone: +46 8 719 5340, +46 70 533 4750
E-mail: maria.bernstrom@lme.ericsson.se
Media
Pia Gideon, Vice President, External Relations
Phone: +46 8 719 2864, +46 70 519 2864
E-mail: pia.gideon@lme.ericsson.se
A registration statement relating to these securities has been filed
with the Securities and Exchange Commission but has not yet become
effective. The securities may not be sold nor may offers to buy be
accepted prior to the time the registration statement becomes
effective. This press release shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any sale of
these securities in any state in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities law of any such state.
Underwriters, may, at any time up to the latest time for acceptance
and payment in full of the nil paid rights, engage in trading
activity with a view to managing the risk of the rights issue. Such
activity may include purchases and sales of securities of the Company
(including the nil paid rights and ordinary shares) and related
securities or instruments and be effected on any securities market,
over the counter market, stock exchange or otherwise, in accordance
with applicable law and regulation.
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