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  • 2005-06-09 Determination of the Acquisition Cost of KONE and Cargotec Shares, and the Subscription Price of Option Rights
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Determination of the Acquisition Cost of KONE and Cargotec Shares, and the Subscription Price of Option Rights

Stock Exchange Release Published 09/06/2005

Kone Corporation demerged into two new listed corporations, KONE Corporation and Cargotec Corporation, on 1 June, 2005. The acquisition cost for KONE and Cargotec shares, and the subscription price of the respective option rights are determined as follows:

Acquisition Cost of Shares

According to the advance ruling from the Finnish Central Board of Taxation, the acquisition cost of KONE and Cargotec shares is considered to be the part of the acquisition cost of Kone Corporation’s shares that correspond to the proportion of the net assets of Kone Corporation transferred to New KONE and Cargotec. If it is apparent that the proportion of the net assets of KONE and Cargotec substantially differs from the proportion of the current values of KONE and Cargotec shares, the proportion of the current values is used as the basis for dividing the acquisition cost between the shares. In this case, the average weighted trading price of the first trading day on 1 June, 2005, or secondarily the corresponding value of the first five trading days, if the latter is considered to better reflect the shares’ current values, can be considered as the current value of the shares.

The proportion of net assets transferred to KONE and Cargotec will be determined in the final settlement of the dissolved Kone Corporation, which will be published at a later date. The other two alternatives for determining the acquisition cost are the following:

Proportion based on first day’s average weighted trading price:

  • KONE Corporation: 64.49%
  • Cargotec Corporation: 35.51%

Proportion based on first five day’s average weighted trading price:

  • KONE Corporation: 64.66%
  • Cargotec Corporation: 35.34%

The final determination of the acquisition cost will be made by the tax authority of the shareholder.

Subscription Price for Shares with KONE and Cargotec Option Rights

The subscription price for shares in dissolved Kone Corporation with option rights was EUR 24.67 per share. The subscription prices for KONE and Cargotec option rights have been determined according to the proportion of the market values of KONE and Cargotec shares as follows:

  • The subscription price of KONE 2005 A and 2005 B option rights is EUR 16.08 per share.
  • The subscription price of Cargotec 2005 A and 2005 B option rights is EUR 8.59 per share.

The calculated market value for the KONE share, EUR 44.25, and for the Cargotec share, EUR 23.64, are based on the weighted average trading price in the period 2-8. June, 2005. Three shares in the respective corporation can be subscribed with each KONE and Cargotec 2005 A and 2005 B option right.

Sender:

KONE Corporation

Tapio Hakakari
Director, Secretary to the Board

Minna Mars
Senior Vice President,
Corporate Communications & IR

For further information, please contact:
Tapio Hakakari, Director, Secretary to the Board, tel. +358 (0)204 75 4226
Paul Lönnfors, IR Manager, tel. +358 (0)204 75 4502

KONE is the world’s fourth largest elevator company and provides complete and innovative solutions for the installation, maintenance and modernization of elevators and escalators and the maintenance of automatic building doors. KONE provides safe and easy access to hundreds of millions of people daily in all parts of the world. KONE has annual net sales of approximately EUR 2.9 billion and about 25,500 employees. Its class B shares are listed on the Helsinki Exchanges.

www.kone.com