E.ON SE

Regulatory Filings • Oct 1, 2001

News Details

Ad-hoc | 1 October 2001 08:33

E.ON AG english

Ad-hoc-announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– E.ON sells MEMC E.ON has signed an agreement to sell its 71.8 percent stake in MEMC of St. Peters, Missouri, including shareholder loans, to San Francisco-based Texas Pacific Group (TPG), a financial investor, for a nominal consideration up to a maximum amount of 150 Mio US-Dollar based upon a substantially improved earnings performance by MEMC in 2002. The transaction is expected to be completed during the fourth quarter 2001 and is subject to the satisfaction of certain conditions. In particular, TPG and MEMC must reach agreement on the details of MEMC’s capital restructuring and new financing. Following this spring’s downturn in the semiconductor and wafer sector, MEMC needs additional liquidity. Because MEMC does not belong to E.ON’s core business, the Company is not prepared to further finance silicon wafer operations. MEMC will negatively impact E.ON’s 2001 Group net income after taxes and minority interests by a total of roughly 860 million euros. Under U.S. GAAP, this figure will be reported in E.ON’s Consolidated Statements of Income under “discontinued operations,” since the transaction involved the sale of an entire division. The total charges include MEMC’s ongoing operating losses and the valuation allowance related to deferred tax assets at MEMC already taken in the first half of 2001. They also reflect the complete writedown of E.ON’s MEMC exposure and the additional funding until closing. E.ON already took around 300 million euros of the 860 million euros in total charges in the first half of 2001. The additional amount resulting from the sale thus amounts to approximately 560 million euros. E.ON continues to expect that Group internal operating profit for 2001 will markedly surpass the previous year’s number. In addition to this already anticipated increase, Group internal operating profit will be positively impacted by the fact that it will no longer contain MEMC’s losses. end of ad-hoc-announcement (c)DGAP 01.10.2001 Issuer’s information/explanatory remarks concerning this ad-hoc-announcement: The agreement lays the groundwork for E.ON to make a complete and near-term exit from the highly cyclical wafer business, a sector currently characterized by a very difficult market environment. The transaction also preserves MEMC’s ability to continue as an on-going business. After completing the transaction, TPG anticipates strengthening MEMCs’ capital structure and making available new financing. This release contains certain forward-looking statements that are subject to risk and uncertainties. For information identifying economic, currency, technological, competitive, and some other important factors that could cause actual results to differ materially from those anticipated in the forward- looking statements, you should refer to E.ON’s and MEMC’s filings to the Securities and Exchange Commission (Washington, DC), as updated from time to time, in particular to the discussion included in the section of E.ON’s 2000 Annual Report on Form 20-F entitled “Item 3. Key Information: Basic Risk Factors” and in the section of MEMC’s 2000 Annual Report on Form 10-K entitled “Item 1. Business-Risk Factors”. The ability of TPG and MEMC to reach agreement regarding MEMC’s capital restructuring and other conditions to the closing of the transaction between E.ON and TPG represent additional sources of risk and uncertainty. ——————————————————————————– WKN: 761440; Index: DAX, EURO STOXX 50 Listed: Amtlicher Handel in Berlin, Bremen, Düsseldorf, Frankfurt, Hamburg, Hannover, München und Stuttgart; Eurex; Swiss Exchange; New York 010833 Okt 01