Stock Exchange release October 29, 2004 08:16:44 AM CET

Metso Launches Debt Exchange Offer

 
Metso Corporation is offering to exchange any and all of its Eurobond 6.25 per cent Notes due 2006 (the 'Existing Notes'), for Euro denominated Fixed Rate Notes due 2011 (the 'New Notes').
This transaction demonstrates the Company's commitment to managing its debt portfolio with a long-term view. Through the exchange, Metso aims to lengthening its debt maturity profile, while offering investors an opportunity to stay invested in the Company's longer-dated credit. The transaction will also further reduce the refinancing requirements for 2006.
Metso is committed to improving its credit profile and has already taken a number of active restructuring steps during 2003 and 2004 to improve its operating performance. Whilst the restructuring has had a short-term negative financial impact the target has been to create a sustainable profitability improvement. The positive impacts of the actions taken are already visible in most of Metso's business areas. In addition, the recent divestment of its compaction and paving equipment business, Dynapac, decreased the Company's gearing by approximately 27 percentage points and hence significantly strengthened Metso's balance sheet.
Holders are offered the opportunity to offer to exchange any and all of their holdings in the Existing Notes at the following indicative spread range. Initial price communication on the New Notes will commence on 3 November, 2004.
Bond
Reference Rate
Exchange Spread Range
EUR 500mn 6.25% due 11 Dec., 2006 (of which EUR 412 mn is outstanding)
OBL 4.5% due 18 August 2006 #138
0.60% - 0.50%
The Exchange Offer is conditional on valid acceptances being received from holders of Existing Notes representing, in aggregate, a minimum of EUR 175 mn of the aggregate principal amount of the Existing Notes. The Company may issue on the Settlement Date additional notes off the Programme, which shall be fungible with the New Notes and listed on the Luxembourg Stock Exchange. The sum of the Additional Notes and the New Notes will be targeted to a size of EUR 250mn.
The anticipated transaction timetable is summarized below. The exchange will be executed via the relevant clearing systems. All information, as well as a full description of the conditions of the offer is more fully described in the Exchange Offer Memorandum.
Timetable
Event
October 29, 2004
Announcement of Exchange Offer
November 8, 2004
Announcement of Final Fixed Spreads
November 11, 2004, at 3pm CET
Expiration of Exchange Offer
November 12, 2004, at 1pm CET
Exchange Pricing
November 19, 2004
Expected Settlement of Exchange Offer
Deutsche Bank and Merrill Lynch are acting as Dealer Managers in this transaction. Citibank, Nordea and Skandinaviska Enskilda Banken are acting as Co-Dealer Managers. Citibank is acting as Exchange Agent.
Metso Corporation is a global supplier of process industry machinery and systems, as well as know-how and aftermarket services. The Corporation's core businesses are fiber and paper technology (Metso Paper), rock and mineral processing (Metso Minerals) and automation and control technology (Metso Automation). In 2003, the net sales of Metso Corporation were EUR 4.3 billion. Metso has approximately 23,000 employees in over 50 countries. Metso Corporation is listed on the Helsinki and New York Stock Exchanges.
For further information:
Pekka Hölttä, Senior Vice President, Corporate Treasurer, Metso Corporation, tel. +358 204 84 3195
Eeva Mäkelä, Vice President, Investor Relations, Metso Corporation, tel. +358 204 84 3253
Further details on the transactions can be obtained from:
Dealer Managers:
 
Exchange Agent:
 
This announcement is not for distribution in the US, Italy, Spain, Canada, Australia or Japan. The Exchange Offer is restricted by the laws of the US, Spain, Italy, France, the United Kingdom, Belgium and Germany, as described below.
This press release does not constitute, or form part of, any solicitation of any offer or invitation to sell any securities in any jurisdiction nor shall it (or any part of it), or the fact of its distribution, form the basis of or be relied on in connection with any contract therefore. No indications of interest in the solicitation of offers to sell are sought by this press release. The Exchange Offer is not made to, and any offers will not be accepted from, or on behalf of, holders of Existing Notes in any jurisdiction in which the making of the Exchange Offer will not be in compliance with the laws or regulations of such jurisdiction.
OFFER RESTRICTIONS
Neither this Announcement nor the Exchange Offer Memorandum constitutes an invitation to participate in the Exchange Offer in any jurisdiction in which, or to or from any person to or from whom, it is unlawful to make such invitation under applicable securities laws. The distribution of this Announcement or the Exchange Offer Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession this Announcement or the Exchange Offer Memorandum come are required by each of the Company, the Dealer Managers and the Exchange Agents to inform themselves about, and to observe, any such restrictions.
United States
. The Exchange Offer is not being made and will not be made directly or indirectly in, or by use of the mails of, or by any means or instrumentality of interstate or foreign commerce of, or any facilities of a national securities exchange of, the United States of America. This Announcement, the Exchange Offer Memorandum and any related offering documents may not be sent or given to a person in the United States of America. Each holder of Existing Notes participating in this Exchange Offer will represent that it is not located in the United States of America and is not a U.S. Person (within the meaning of Regulation S of the Securities Act) and is not giving an order to participate in the Exchange Offer from the United States of America or on behalf of a U.S. Person.
Spain
. The Exchange Offer is not available to any resident of Spain. Accordingly, residents of Spain may not submit for exchange the Existing Notes in the Exchange Offer nor may the New Notes be offered, sold or delivered in Spain and neither may this Announcement nor any other offering material relating to the Exchange Offer, the Existing Notes or the New Notes be distributed or made available in Spain.
Italy
. The Exchange Offer is not being made in the Republic of Italy and has not been submitted to the clearance procedure of Commissione Nazionale per le Società e la Borsa (CONSOB) or the Bank of Italy pursuant to Italian laws and regulations. Accordingly, holders of Existing Notes are hereby notified that, to the extent such holders are Italian residents or persons located in the Republic of Italy, the Exchange Offer is not available to them and they may not submit for exchange the Existing Notes in the Exchange Offer nor may the New Notes be offered, sold or delivered in the Republic of Italy and, as such, any acceptances received from such persons shall be ineffective and void, and neither may this Announcement nor any other offering material relating to the Exchange Offer, the Existing Notes or the New Notes be distributed or made available in the Republic of Italy.
This press release does not constitute a public offer or solicitation ("démarchage") under French laws and regulations, in the Republic of France.
There are selling restrictions on the Exchange Offer in the United Kingdom, Belgium and Germany
This Announcement or any other offering material relating to the Exchange Offer does not constitute an offer to buy or the solicitation of an offer to sell the Existing Notes and/or New Notes in any circumstances in which such offer or solicitation is unlawful. In those jurisdictions where the securities, blue sky or other laws require the Exchange Offer to be made by a licensed broker or dealer, the Exchange Offer shall be deemed to be made on behalf of the Dealer Managers or one or more registered brokers or dealers licensed under the laws of such jurisdiction.
Neither the delivery of this Announcement or any other offering material relating to the Exchange Offer nor any purchase of Existing Notes shall, under any circumstances, create any implication that the information contained herein is current as of any time subsequent to the date of such information or that there has been no change in the information set out in it or in the affairs of the Company since the date of the Exchange Offer Memorandum.