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KONE’s Demerger Progresses

KONE’s Demerger Progresses

Stock Exchange Release Published 19/10/2004

<p>On 16 August 2004, KONE Corporation’s board of directors decided to begin preparation for the division of the company into two separate corporations, a process estimated to last approximately one year. The demerger preparations have begun and based on the work done up till now, KONE’s board decided today on a more detailed demerger timetable. The objective is to complete the listing of the two corporations, and to have their shares quoted on the Helsinki Exchanges on June 1, 2005.


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According to the board’s proposal, the corporation’s demerger plan is based on the closing of the books for the period 1 January - 30 September, 2004. The demerger plan will be completed in October and dealt with in a board meeting at the beginning of November. At that time, the board will call for an extraordinary general meeting in December to decide on the demerger. The demerger plan and invitation to the shareholders’ meeting will be announced following the board meeting. The demerger prospectus, which includes information about the demerger, the corporation being demerged and the corporations to be formed in the demerger, will be available to shareholders within eight working days prior to the extraordinary general meeting.


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In order for the demerger to proceed as quickly as possible, the board will propose to the extraordinary general meeting, that the accounting period be extended from 12 to 15 months and end on 31 March, 2005. This will allow for as extensive and up-dated financial statements as possible to be available at the time of listing. In addition, the resources in corporate administration can be focused on preparing and completing the demerger. The corporate structures and administrations, and their processes will be organized by the end of the extended accounting period.


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KONE’s distribution of dividends will take place May 2005 due to the extended accounting period.


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The aim is to treat KONE’s option right holders in the precise same manner as shareholders. Therefore the board aims to propose that the holders of option rights would receive option rights in the corporations to be formed in the demerger on the same basis as shareholders receive new shares.


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The demerger process and extended accounting period affect the publication timetable of KONE’s financial information as follows: 12 month annual review will be published on 28 January, 2005 and the financial statements for the extended period 1 January, 2004-30 March, 2005 will be published on 2 May, 2005.


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Sender:


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KONE Corporation


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Tapio Hakakari


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Director, Secretary to the Board of Directors


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Minna Mars


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Senior Vice President, Corporate Communications &amp; IR


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<strong>For further information, please contact:</strong>


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Tapio Hakakari, Director, Secretary to the Board of Directors, tel. +358 (0)204 75 4226


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www.konecorp.com


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