Kemira Oyj - Company Announcement

KEMIRA ANNOUNCES EUR 200 MILLION RIGHTS OFFERING TO SUPPORT KEMIRA'S STRATEGY

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR
INTO AUSTRALIA, CANADA, HONG KONG, JAPAN, SOUTH AFRICA OR UNITED STATES. 

Kemira Group
Stock Exchange Release
October 28, 2009 at 12.12


Kemira Oyj (“Kemira” or the “Company”) announced today that the Board of
Directors of Kemira has decided to undertake a share offering to raise gross
proceeds of approximately EUR 200 million through an issue of new shares with
pre-emptive rights for existing shareholders (the “Rights Offering”). The four
largest shareholders of the Company support the Rights Offering. The proceeds
of the Rights Offering will be used to support Kemira's growth strategy and
vision to be a leading water chemistry company, to enable the separation and
listing of Tikkurila and to strengthen Kemira's balance sheet. The Rights
Offering is subject to shareholder approval at an Extraordinary General Meeting
of shareholders scheduled to be held on November 23, 2009. 

SEB Enskilda is acting as the Financial Advisor to the Company. Nordea and SEB
Enskilda are acting as Joint Lead Managers for the contemplated Rights
Offering. 

Harri Kerminen, President and CEO

“This year, Kemira has sharply focused on improving its cash flow. In
January-September, cash flows after investments were very strong, EUR 175
million. Reasons for this were, among other things, effective working capital
management, higher EBITDA, and smaller capital expenditure. With the strong
cash flow, our gearing fell considerably and reached 87% at the end of
September, which is already close to our target level of 40−80%. 

Operating profit excluding non-recurring items in continuing businesses rose by
22% in the third quarter from the same period a year earlier. This is due in
large part to efficiency improvement measures, fixed cost management, and lower
variable costs compared to the same period last year. The Municipal &
Industrial segment (previously Water) was able to significantly strengthen its
operating profit and cash flow. In July-September, Kemira's operating profit
excluding non-recurring items accounted for 10% of revenue compared with 7% a
year earlier. Our medium-term target level for operating profit as a percentage
of revenue is 10%. 

Kemira's vision is to be a leading water chemistry company. Operational
efficiency enhancement, profitability improvement and stronger cash flows and
balance sheet continue to be our key focus areas, but we are gradually taking
steps to also accelerate revenue growth. Our organic growth objective is 5% per
year. The rights offering will support Kemira's growth strategy.” 

Key Highlights

• Kemira's four largest shareholders, Oras Invest Ltd, Solidium Oy, Varma
Mutual Pension Insurance Company and Ilmarinen Mutual Pension Insurance
Company, representing in the aggregate 48.7 percent of the existing shares of
the Company, have irrevocably committed to subscribe for their pro-rata
entitlement of the new shares offered for subscription in the Rights Offering. 
• In addition, Oras Invest Ltd, Solidium Oy, Varma Mutual Pension Insurance
Company and Ilmarinen Mutual Pension Insurance Company have undertaken to
subscribe for new shares that may remain unsubscribed in the Rights Offering
for a total subscription price of up to EUR 48.7 million. 





• Subject to the approval of the Rights Offering by the Extraordinary General
Meeting of shareholders on November 23, 2009, the terms of the Rights Offering,
including the number of shares to be issued and their subscription price, are
scheduled to be determined by the Board of Directors of Kemira and announced on
or about November 23, 2009. 
• The subscription period for the Rights Offering is expected to be from
December 1 up to and including December 18, 2009. 

Background to and Reasons for the Rights Offering

In June 2008, Kemira announced its new strategy according to which the Company
will focus on serving water-intensive customer industries. The first phase of
this strategy focuses on the enhancement of profitability, the improvement of
cash flow and the strengthening of balance sheet. 

In September 2009, Kemira presented a more detailed growth strategy focusing on
water quality and quantity management with a vision of being a leading water
chemistry company. Kemira is focusing on water-intensive customer industries,
where it is possible to combine the Company's product and application knowledge
with its expertise in industrial and customer processes, improving customers'
energy, water, and raw material efficiency. Kemira's three segments, Paper,
Municipal & Industrial and Oil & Mining, can all utilize largely the same
product know-how and chemistry, which Kemira has built up through dedicated
research and development efforts as well as a number of acquisitions. One of
Kemira's financial targets is to create organic growth and, in order to reach
that target, Kemira intends to invest in new technologies and new markets. 

As a part of the new strategy, Kemira has also announced its plan to separate
Tikkurila and to list Tikkurila's shares on the Helsinki Stock Exchange once
market conditions permit. The management of Kemira believes that Tikkurila's
separation and stock exchange listing, if completed, would increase the
transparency of Kemira's operations and would support making Kemira an even
more focused company. 

Implementation of Growth Strategy

Investment in research and development is a central part of Kemira's long-term
strategy. The direction for new technology development is to leverage water
quality management into water quality and quantity management. Water quality
management combines Kemira's current competence in existing chemicals and
applications to improve the productivity and efficiency of its customers'
processes. Water quality and quantity management relates to the improvement of
overall water efficiency of industrial processes by using less raw water and
more recycling and by generating less discharge. The management of Kemira
believes that more restrictive legislation, the mounting requirements for clean
water in emerging market countries and the development of new water treatment
technologies are providing Kemira with new opportunities to leverage its strong
competence in water quality management. 

Kemira is seeking expansion in selected growth markets in South America and
Asia Pacific where demand for water quality and quantity management based
offerings is growing in all of its core segments. As a part of its increasing
focus on growth projects in selected emerging markets, Kemira plans to increase
its investments in these markets. 

Listing of Tikkurila

The Rights Offering is expected to enable the listing of Tikkurila when market
conditions permit. Kemira's Board of Directors has approved a planned structure
for the listing. According to the planned structure Kemira would distribute a
substantial majority of the shares of Tikkurila as dividend to Kemira's
shareholders. In connection with Tikkurila's listing there is no intention to
raise cash proceeds for Kemira nor issue new shares of Tikkurila. 

Strengthening of the Balance Sheet

The Rights Offering is expected to reduce Kemira's gearing to a level clearly
below 80 percent and would, therefore, strengthen the Company's balance sheet
and create strategic flexibility for future growth. 

Principal Terms of the Rights Offering

The total gross proceeds from the Rights Offering are expected to be
approximately EUR 200 million. The terms of the Rights Offering, including the
number of shares to be issued and their subscription price, are scheduled to be
determined by the Board of Directors on or about November 23, 2009. 

Kemira's four largest shareholders, Oras Invest Ltd, Solidium Oy, Varma Mutual
Pension Insurance Company and Ilmarinen Mutual Pension Insurance Company,
representing in the aggregate 48.7 percent of the existing shares of the
Company, have irrevocably committed to subscribe for their pro-rata entitlement
of the new shares offered for subscription in the Rights Offering. 

In addition, Oras Invest Ltd, Solidium Oy, Varma Mutual Pension Insurance
Company and Ilmarinen Mutual Pension Insurance Company have undertaken to
subscribe for new shares that may remain unsubscribed for in the Rights
Offering for a total subscription price of up to EUR 48.7 million. Depending on
the subscription ratio and subscription price per share, the aggregate amount
of the subscription guarantees may increase or decrease by up to EUR 0.5
million. 

The new shares will rank pari passu in all respects with the existing shares of
Kemira, including but not limited to the right to any future dividends and
other distributions declared after the date of registration of the new shares
with the Finnish Trade Register. 

The Extraordinary General Meeting of shareholders is scheduled to be held in
Helsinki on November 23, 2009 at 10:00 a.m. at Marina Congress Center. The
notice for the Extraordinary General Meeting of shareholders has been published
in a separate press release today. The proposal of the Board of Directors
regarding the authorization for the Rights Offering and other information
relating to the proposal will be made available on Kemira's website
www.kemira.com on October 30, 2009. 

Preliminary Timetable for the Rights Offering

The timing of events is indicative. All dates refer to 2009.

- November 23	Extraordinary General Meeting of shareholders to authorize the
Board of Directors to undertake the Rights Offering 
- November 23	Board of Directors to resolve on the more detailed terms of the
Rights Offering, including the number of shares to be issued and the
subscription price to be paid for the new shares 
- November 25	Prospectus relating to the Rights Offering available on the
Company's website 
- November 26	Record date of the Rights Offering
- December 1-18	Subscription period
- December 1-11	Period of public trading with subscription rights
- December 29	Announcement of the final outcome of the Rights Offering





International Telephone Conference for Investors, Analysts and the Press

An English-language telephone conference call will be held October 28, 2009 at
15:00 p.m. Finnish time (13:00 a.m UK-time). To participate in the conference
call, please dial-in ten minutes prior to the start +44 (0)20 7162 0125,
meeting code 848374. 

Helsinki, October 28, 2009


KEMIRA OYJ
Board of Directors

For more information, please contact:

Jyrki Mäki-Kala, CFO
Tel. +358 10 86 21589

Päivi Antola, Senior Manager, IR and Financial Communications,
Tel. +358 10 86 21140


KEMIRA

Kemira is a global 2.8 billion euro chemicals company that is focused on
serving customers in water-intensive industries. The company offers water
quality and quantity management that improves customers' energy, water, and raw
material efficiency. Kemira's vision is to be a leading water chemistry
company. Its paints and coatings business, Tikkurila, aims to be the market
leader in decorative paints and selected wood and metal coatings in chosen
markets. 

www.kemira.com

DISCLAIMER:

The information contained herein is not for publication or distribution,
directly or indirectly, in or into Australia, Canada, Hong Kong, Japan, South
Africa and the United States. These written materials do not constitute an
offer of securities for sale in the United States, nor may the securities be
offered or sold in the United States absent registration or an exemption from
registration as provided in the U.S. Securities Act of 1933, as amended, and
the rules and regulations thereunder.  There is no intention to register any
portion of the offering in the United States or to conduct a public offering of
securities in the United States. 

The information contained herein shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of the securities
referred to herein in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration, exemption from registration or
qualification under the securities laws of any such jurisdiction. 

This communication does not constitute an offer of securities to the public in
the United Kingdom.  No prospectus has been or will be approved for publication
in the United Kingdom in respect of the securities.  Consequently the
securities must not be sold or offered for sale in the United Kingdom, except
to persons who fall within the exemptions set out in the Financial Services and
Markets Act 2000 (Financial Promotion) Order 2005, as amended.

Attachments:

20091028_se_2_kemira_announces_eur_200_million_rights_offering.pdf