Elcoteq - Company Announcement

Elcoteq Announces an Exchange Offer to Its Debenture Holders

Elcoteq SE
Stock Exchange Release
April 16, 2010 at 13.45 pm (EET)

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

Elcoteq Announces an Exchange Offer to Its Debenture Holders

Elcoteq SE (“Elcoteq” or “Company”) launches an exchange offer (“Exchange
Offer”) to the debenture holders under debenture programs I/2004, I/2005 and
II/2005 issued by the Company ("Debentures"). Under the Exchange Offer, hybrid
bonds (“Hybrid Bonds”) and warrants (“Warrants”) will be offered in exchange
for the Debentures. Pohjola Corporate Finance is acting as Manager for the
Exchange Offer. 

Background to the Exchange Offer
On March 31, 2010, Elcoteq announced that it had entered into a term sheet with
its senior lenders with respect to a new revolving credit facility in the
amount of EUR 100 million. The agreed facility will mature on June 30, 2011.
The financing arrangement sets out, that outstanding Debentures of the Company,
in an amount deemed sufficient by the lenders, are converted into hybrid loans
or other instruments which are regarded as equity in the Company's financial
statements. In order to secure its future financing and operations and to meet
the aforementioned requirements, Elcoteq is now launching the Exchange Offer,
in accordance with its announcement of March 31, 2010. The nominal amount of
the currently outstanding Debentures is approximately EUR 35 million. 

Exchange ratio and allocation of Warrants
In the Exchange Offer, each Debenture holder will have the right to exchange
Debentures for an equivalent nominal amount of Hybrid Bonds. 

In addition to Hybrid Bonds, each Debenture holder accepting the Exchange Offer
will receive Warrants free of charge. Number of Warrants to be issued in the
Exchange Offer is dependent of the exchange ratio so that the maximum number of
Warrants to be issued is 7,000,000. The exact number of Warrants to be issued
will be calculated in accordance with predetermined calculation methods
described in the terms and conditions of the Exchange Offer included in the
prospectus to be published in connection with the Exchange Offer and in the end
of this announcement. 

The New Securities
The Hybrid Bonds will have no maturity date and they are treated as equity
under IFRS. According to the terms and conditions of the Hybrid Bonds, the
Company will have the right to redeem the Hybrid Bonds at its option at the
earliest on December 15, 2012. The Hybrid Bonds accrue interest at a fixed rate
of 5 % per annum until December 15, 2012. From and including December 15, 2012,
interest will be calculated using the 3 month EURIBOR rate plus a margin of 15%
per annum. In addition, the Debenture holders will receive an additional
interest payment, which shall be paid on December 15, 2012. The amount of the
additional interest is dependent on the conversion ratio of the Debentures
under the Exchange Offer and will be calculated in accordance with a
predetermined formula set out in the terms and conditions of the Hybrid Bonds
included in the prospectus to be published in connection with the Exchange
Offer and in the end of this announcement. 

Each Warrant will entitle its holder to subscribe for one new series A share in
the Company at a subscription price of EUR 0.40. The exercise period of the
Warrants will commence on March 16, 2012 and expire on April 11, 2012. Provided
that the Warrants are issued and exercised in full, the 7,000,000 series A
shares issued as a result of such exercise will represent approximately 17.53%
of the Company's shares and votes conferred by all shares after the exercise of
the Warrants on a fully diluted basis. The calculations include the previously
announced conversion of K founders' shares into series A shares. 

Conditions to the Exchange Offer
Implementation of the Exchange Offer is conditional upon the following:
- The exchange ratio of the Exchange Offer is no less than 50%; and
- Final loan documentation relating to the revolving credit facility of EUR 100
million is concluded. 

Commitments
Certain banks holding Debentures for their own account and for the account of
their discretionary asset management clients have given undertakings to
participate in the Exchange Offer. The undertakings are subject to certain
customary conditions such as the acceptance ratio of the Exchange Offer being
no less than 50%. These undertakings cover in total 46.18% of the Debentures. 

Expected timetable
The acceptance period for the Exchange Offer will commence on April 22, 2010 at
9:00 (Finnish time) and expire on May 5, 2010 at 16:00 (Finnish time)
("Exchange Offer Period"), unless the Exchange Offer Period is extended.
Elcoteq may extend the Exchange Offer Period at any time by a maximum of ten
(10) business days at a time and discontinue such Exchange Offer Period, in
each case by means of a stock exchange release. 

Publication of a prospectus
Elcoteq will publish a prospectus relating to the Exchange Offer after the
approval of prospectus by the Luxembourg financial supervision authority,
Commission de Surveillance du Secteur Financier (CSSF), which is expected to
take place on April 16, 2010. The prospectus will be available on the Company's
website (www.elcoteq.com) on or about April 19, 2010 and in paper form from
Pohjola Corporate Finance Ltd. The prospectus will be notified to the Finnish
Financial Supervisory Authority. A summary of the prospectus as well as
unofficial translations of the terms and conditions of the Exchange Offer, the
Hybrid Bonds and the Warrants will be available in Finnish on the Company's
website and in paper form from Pohjola Corporate Finance Ltd. 

Announcement of the Result of the Exchange Offer
A preliminary result of the Exchange Offer will be announced by a stock
exchange release on or about the first banking day in Finland following the
expiration of the Exchange Offer Period. The final result of the Exchange Offer
(including the final amount of Hybrid Bonds and Warrants issued) and whether
the Exchange Offer will be completed will be published following the expiration
of the Exchange Offer Period and as soon as the Company has made a decision to
complete the Exchange Offer. 

Conference call relating to the Exchange Offer
A conference call in Finnish for investors and analysts will be held on April
16, 2010 at 16:30 pm Finland, 15:30 pm (CET).  To register as a participant for
the conference call, please dial in 5 to 10 minutes before the beginning of the
event: 

Dial-in number (Finland): +358 9 2319 4486
Conference code: 6696696329#


ELCOTEQ SE

Satu Jaatinen
Communications Manager

Further information:
Mikko Puolakka, CFO, tel. +358 10 413 1287


About Elcoteq

Elcoteq SE is the global Life Cycle Service Partner for high-tech product and
service companies. 
Engineering, Manufacturing, Fulfillment and After Market Services are the
cornerstones of Elcoteq's extensive service offering. Elcoteq has a proven
track record in electronics manufacturing services (EMS) and a global factory
network coupled with modern manufacturing equipment and consistent systems and
processes. 
Products include Consumer Electronics devices such as mobile phones and their
accessories, set-top boxes, flat panel TVs as well as System Solutions products
such as infrastructure systems, modules and other industrial segment products. 
The Group's consolidated net sales for 2009 totaled 1.5 billion euros and it
employs approximately 10,000 persons. Elcoteq SE is listed on the Nasdaq OMX
Helsinki Ltd. For more information visit the Elcoteq website at
www.elcoteq.com. 

DISCLAIMER:

The information contained herein is not for release, publication or
distribution, directly or indirectly, in whole or in part, in or into
Australia, Canada, Hong Kong, Japan, South Africa, or the United States. The
information contained herein does 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 United States 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 any 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 in the United
Kingdom in respect of the securities. Consequently, this communication is
directed only at (i) persons who are outside the United Kingdom, (ii) to
investment professionals falling within Article 19(5) of the Financial Services
and Markets Act 2000 (Financial Promotion) Order 2005 (the "FP Order") and
(iii) high net worth entities falling within Article 49(2) of the FP Order, and
other persons to whom it may lawfully be communicated, (all such persons
together being referred to as "relevant persons"). Any investment activity to
which this communication relates will only be available to, and will only be
engaged with, relevant persons. Any person who is not a relevant person should
not act or rely on this document or any of its contents. 

Any offer of securities to the public that may be deemed to be made pursuant to
this communication in any EEA Member State that has implemented the Prospectus
Directive is only addressed to qualified investors in that Member State within
the meaning of the Prospectus Directive. 

This document is an advertisement for the purposes of applicable measures
implementing Directive 2003/71/EC (such Directive, together with any applicable
implementing measures in the relevant home Member State under such Directive,
the "Prospectus Directive"). A prospectus prepared pursuant to the Prospectus
Directive will be published in connection with any offering of securities, and
will be available at locations receiving acceptances for the Exchange Offer. 

This document includes forward-looking statements. These forward-looking
statements include all matters that are not historical facts, statements
regarding Elcoteq's intentions, beliefs or current expectations concerning,
among other things Elcoteq's results of operations, financial condition,
liquidity, prospects, growth, strategies and the industry in which Elcoteq
operates. By their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on circumstances that
may or may not occur in the future, and speak only as of the date they are
made. Elcoteq cautions you that forward-looking statements are not guarantees
of future performance and that its actual results of operations, financial
condition and liquidity and the development of the industry in which Elcoteq
operates may differ materially from those made in or suggested by the
forward-looking statements contained in this presentation. In addition, even if
Elcoteq's results of operations, financial condition and liquidity and the
development of the industry in which Elcoteq operates are consistent with the
forward-looking statements contained in this document, those results or
developments may not be indicative of results or developments in future
periods. Elcoteq does not undertake any obligation to review or confirm
expectations or estimates or to release publicly any revisions to any
forward-looking statements to reflect events that occur or circumstances that
arise after the date of this document. 

Pohjola Corporate Finance is acting exclusively for Elcoteq and no one else in
connection with the Exchange Offer. It will not regard any other person
(whether or not a recipient of this document) as a client in relation to the
Exchange Offer and will not be responsible to anyone other than Elcoteq for
providing the protections afforded to its clients, nor for giving advice in
relation to the Exchange Offer or any transaction or arrangement referred to
herein. No representation or warranty, express or implied, is made by Pohjola
Corporate Finance as to the accuracy, completeness or verification of the
information set forth in this release, and nothing contained in this release
is, or shall be relied upon as, a promise or representation in this respect,
whether as to the past or the future. Pohjola Corporate Finance assumes no
responsibility for its accuracy, completeness or verification and, accordingly,
disclaims, to the fullest extent permitted by applicable law, any and all
liability which it may otherwise be found to have in respect of this release.

Priedai:

terms and conditions.pdf

ser_publication of exchange offer_16042010.pdf