Elcoteq - Company Announcement

Elcoteq Completes the Exchange Offer to Debenture Holders Successfully

Elcoteq SE
Stock Exchange Release
May 11, 2010 at 8.30 am (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 completes the Exchange Offer launched on April 16, 2010 successfully,
which is another significant step in the debt restructuring and financial
stabilization of the Company. Of the total EUR 34.6 million outstanding
debentures, holders of EUR 21.5 million have tendered their debentures for a
hybrid bond and warrants in the exchange offer. As a result of this transaction
as well as the issuance of EUR 29 million hybrid bonds and the redemption of
EUR 105 million of debentures in January 2010, the Company's indebtedness and
solvency have improved significantly. Had these transactions taken place on
December 31, 2009, Elcoteq's adjusted shareholders' equity would have amounted
to EUR 139.4 million, interest bearing net debt to EUR 60.6 million and the
adjusted gearing to 0.4. 

Elcoteq SE (“Elcoteq”) hereby announces that holders of debenture programs
I/2004 due on December 22, 2011, I/2005 due on December 22, 2011 and II/2005
due on September 28, 2010 issued by it (“Debentures”) have tendered their
Debentures in the exchange offer announced on April 16, 2010 (”Exchange Offer”)
in respect of a total nominal amount of EUR 21,507,000. This represents an
acceptance ratio of 62.2% in the Exchange Offer, divided between the different
Debenture programs as follows: II/2005: 50.8%, I/2005: 100.0% and I/2004:
44.1%. After completion of the Exchange Offer, approximately EUR 13.1 million
of Elcoteq's debentures remain outstanding. 

The board of directors of Elcoteq has approved the completion of the Exchange
Offer and the issue of EUR 21,507,000 hybrid bonds (“Hybrid Bonds”) and
4,350,138 warrants (“Warrants”) in accordance with the terms and conditions of
the Exchange Offer. The Exchange Offer was conditional upon (1) the Exchange
Offer being accepted by Debenture holders holding more than 50% of the nominal
amount of the currently outstanding Debentures and (2) the entering into of the
final loan documentation relating to the revolving credit facility of EUR 100
million. Both conditions have been met. 

The nominal amount of the Hybrid Bond to be issued is EUR 21,507,000. In
accordance with the terms and conditions of the Hybrid Bonds the aggregate
amount of the additional interest to be paid on the Hybrid Bonds on December
15, 2012 will be approximately EUR 1,740,080, representing approximately 8.09%
one-time yield on the nominal amount of the Hybrid Bonds. 

Debenture holders who have validly accepted the Exchange Offer will receive a
cash payment for the accrued and unpaid interest on the Debentures tendered in
accordance with the terms and conditions of the Debentures calculated until the
date immediately preceding the date on which the Hybrid Bonds are issued. 

In accordance with the terms and conditions of the Exchange Offer, 4,350,138
Warrants in total will be issued, each Warrant entitling its holder to
subscribe for one new Elcoteq series A share 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. 

The holders of Debenture program II/2005 who have validly tendered their
Debentures in the Exchange Offer will receive approximately 300 Warrants for
each EUR 1,000 in nominal amount of the said Debentures. The holders of
Debenture programs I/2004 or I/2005 who have validly tendered their Debentures
in the Exchange Offer will receive approximately 171 Warrants for each EUR
1,000 in nominal amount of the said Debentures. 

Provided that all the 4,350,138 Warrants are fully exercised, the 4,350,138 new
series A shares to be issued as a result of such exercise will represent
approximately 11.7% of Elcoteq's outstanding shares and voting rights conferred
by all shares after the exercise of the Warrants on a fully diluted basis. The
abovementioned percentage assumes the completion of the previously announced
conversion of K founder shares into series A shares. 

The Hybrid Bonds and the Warrants will be entered into the book-entry accounts
of the investors on or about May 11, 2010 and it is anticipated that the
trading of the Hybrid Bonds on the Helsinki stock exchange will begin on or
about May 12, 2010. Elcoteq will apply for the listing and admission to trading
of the Warrants on the Helsinki stock exchange with effect from on or about
December 1, 2010. 

Pohjola Corporate Finance acted as Manager for the Exchange Offer.

Elcoteq completes another important milestone in its debt restructuring

The completion of the Exchange Offer is one further significant step in the
debt restructuring and financial stabilization of Elcoteq. On December 31, 2009
Elcoteq's consolidated shareholders´ equity amounted to EUR 32.6 million,
interest bearing net debt to EUR 187.5 million and gearing to 5.8. After the
issue of EUR 29 million hybrid bonds and the redemption of Elcoteq's then
outstanding debenture bonds for a nominal amount of approximately EUR 105
million in January 2010, and after completion of the Exchange Offer, the
adjusted shareholders' equity would have amounted to EUR 139.4 million,
interest bearing net debt to EUR 60.6 million and the adjusted gearing to 0.4
as of December 31, 2009 had these events taken place on December 31, 2009. "We are very satisfied that we have been successful in our effort to
restructure a significant part of the outstanding debts of Elcoteq. The
completion of the Exchange Offer is a major step in the process to provide
further confidence to Elcoteq's customers and other stakeholders", says Jouni
Hartikainen, President and CEO of Elcoteq. 


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:

ser_result of exchange offer.pdf