Today,Veidekke signed an agreement with a consortium comprisingFredensborg AS , Fredensborg Bolig AS,Norwegian Property ASA and Union Real Estate Fund III Holding AS (Buyer) concerning the sale of the property development operation inNorway andSweden against a cash payment ofNOK 7.7 billion on a debt-free basis. The transaction will generate a posted gain of approximatelyNOK 1.2 billion . The transaction is expected to be completed duringSeptember 2020 . After the sale of the property development operation,Veidekke will be a focused Scandinavian construction group with a strong market and financial position. After completion of the transaction, the Board ofVeidekke will propose payment of an extraordinary dividend ofNOK 20 per share. "Since November,Veidekke has considered various alternatives for the demerger of the property development operation, in order to facilitate its long-term development under a new ownership structure and to focus on the group's construction operation. After a thorough process, the Board has concluded that the best solution both industrially and financially is to divest the business, and this solution will moreover realise shareholder value," saysSvein Richard Brandtzæg , Chair of the Board ofVeidekke . "We are pleased thatVeidekke has accepted our offer, and that we and our partners will ownVeidekke's property development operations inSweden andNorway , which include many exciting projects," saysTollef Svenkerud , Chairman of Fredensborg Bolig. "Ongoing projects are well taken care of by a professional organisation, withBaard Schumann intended to head up the overall operations inNorway andSweden , replacing JørgenWiese Porsmyr , who will remain withVeidekke ASA ," saysBent Oustad , CEO ofNorwegian Property ASA . The transaction will be completed as the Buyer acquires the shares inVeidekke Property Development inNorway andSweden against a consideration in the amount of approx.NOK 3.3 billion . Simultaneously,Veidekke Property Development's debt toVeidekke ASA of approx.NOK 4.2 billion will be repaid, whileNOK 200 million comprising deferred project payments will be paid upon project completion. Invested capital in the property development operation amounted toNOK 6.3 billion (IFRS) at the end of the first quarter. Based on the IFRS accounts, the transaction will generate a posted gain of approx.NOK 1.2 billion . "The transaction will release significant funds, which will placeVeidekke in a strong position for further development of the business.Veidekke will remain a profitable and solid company that continues to create and realise value for our customers, employees and shareholders. Residential construction will remain an integral part of our business, and as a leading Scandinavian residential construction company, we look forward to working with the new owner in the future," saysJimmy Bengtsson , CEO ofVeidekke . At the close of first quarter 2020,Veidekke's net interest-bearing debt amounted toNOK 2.6 billion . Part of the sales proceeds will be used to repay debt, in order to ensure desired adjustments in the financing structure to support the company's future growth and development. Once the transaction is completed, the Board ofVeidekke will convene an extraordinary general meeting in the second half of 2020. The Board will propose to the extraordinary general meeting payment of an extraordinary dividend ofNOK 20 per share from the proceeds from the sale of the property development operation.Veidekke has an unequivocal ambition of distributing remaining liquidity from the transaction, as well as the cancelled dividend based on the 2019 financial statements, in the near future, as soon as the uncertainty e.g. related to the Covid-19 pandemic has been resolved.ABG Sundal Collier and the law firm Schjødt served as, respectively,Veidekke's financial and legal advisers in the process. The consortium's advisers wereArctic Securities ,DNB Markets ,PWC , the law firm Thommessen inNorway , and the law firm Vinge inSweden . Analysts and investors are invited to attend a short video conference today at16:00 CET . There, CEOJimmy Bengtsson and other members ofVeidekke's management team will briefly outline the transaction and answer questions. The video conference will be conducted in Norwegian, without translation. To dial in: Join the meeting: https://pexip.me/meet/7263771052 Phone: +47 67209300 PIN: 7263771052 # One-click smartphone dial-ins: + 4767209300,7263771052 # For more information, contact:Jimmy Bengtsson , Group CEO, ph. +47 984 70 000, jimmy.bengtsson@veidekke.no JørgenWiese Porsmyr , EVP, +47 907 59 058, jorgen-wiese.porsmyr@veidekke.noLars Erik Lund , EVP, ph. +47 413 31 369, lars.lund@veidekke.noBård Schumann , ph. +47 940 80 000, baard.schumann@gmail.comTollef Svenkerud , Chairman Fredenstad Bolig, +47 917 76 594, tollef@fredensborgbolig.noVeidekke press photos (https://veidekke.fotoware.cloud/fotoweb/archives/5028 -Pressebilder-Veidekke/) Subscribe to notices from Veidekke (http://veidekke.com/en/company -disclosures/subscribe-to-releases/) This information is subject to the disclosure requirements pursuant to section 5 -12 of the Norwegian Securities Trading Act.Veidekke is one of Scandinavia's largest construction and property development companies. The company undertakes all types of building construction and civil engineering contracts, develops residential projects, maintains roads, and produces asphalt and aggregates. The company is known for its involvement and local knowledge. Its annual turnover isNOK 39 billion , and half of its 8,600 employees own shares in the company.Veidekke is listed on theOslo Stock Exchange and has always posted a profit since it was founded in 1936.
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