Veidekke

Regulatory Filings • Jun 16, 2020

Veidekke ASA: Divesting the property development operation

Veidekke ASA: Divesting the property development operation

Today, Veidekke signed an agreement with a consortium comprising Fredensborg AS,

Fredensborg Bolig AS, Norwegian Property ASA and Union Real Estate Fund

III Holding AS (Buyer) concerning the sale of the property development operation

in Norway and Sweden against a cash payment of NOK 7.7 billion on a debt-free

basis. The transaction will generate a posted gain of approximately NOK 1.2

billion.

The transaction is expected to be completed during September 2020. After the

sale of the property development operation, Veidekke will be a focused

Scandinavian construction group with a strong market and financial position.

After completion of the transaction, the Board of Veidekke will propose payment

of an extraordinary dividend of NOK 20 per share.

"Since November, Veidekke has considered various alternatives for the demerger

of the property development operation, in order to facilitate its long-term

development under a new ownership structure and to focus on the group's

construction operation. After a thorough process, the Board has concluded that

the best solution both industrially and financially is to divest the business,

and this solution will moreover realise shareholder value," says Svein Richard

Brandtzæg, Chair of the Board of Veidekke.

"We are pleased that Veidekke has accepted our offer, and that we and our

partners will own Veidekke's property development operations in Sweden and

Norway, which include many exciting projects," says Tollef Svenkerud, Chairman

of Fredensborg Bolig.

"Ongoing projects are well taken care of by a professional organisation, with

Baard Schumann intended to head up the overall operations in Norway and Sweden,

replacing Jørgen Wiese Porsmyr, who will remain with Veidekke ASA," says Bent

Oustad, CEO of Norwegian Property ASA.

The transaction will be completed as the Buyer acquires the shares in Veidekke

Property Development in Norway and Sweden against a consideration in the amount

of approx. NOK 3.3 billion. Simultaneously, Veidekke Property Development's debt

to Veidekke ASA of approx. NOK 4.2 billion will be repaid, while NOK 200 million

comprising deferred project payments will be paid upon project completion.

Invested capital in the property development operation amounted to NOK 6.3

billion (IFRS) at the end of the first quarter. Based on the IFRS accounts, the

transaction will generate a posted gain of approx. NOK 1.2 billion.

"The transaction will release significant funds, which will place Veidekke in a

strong position for further development of the business. Veidekke will remain a

profitable and solid company that continues to create and realise value for our

customers, employees and shareholders. Residential construction will remain an

integral part of our business, and as a leading Scandinavian residential

construction company, we look forward to working with the new owner in the

future," says Jimmy Bengtsson, CEO of Veidekke.

At the close of first quarter 2020, Veidekke's net interest-bearing debt

amounted to NOK 2.6 billion. Part of the sales proceeds will be used to repay

debt, in order to ensure desired adjustments in the financing structure to

support the company's future growth and development. Once the transaction is

completed, the Board of Veidekke will convene an extraordinary general meeting

in the second half of 2020. The Board will propose to the extraordinary general

meeting payment of an extraordinary dividend of NOK 20 per share from the

proceeds from the sale of the property development operation. Veidekke has an

unequivocal ambition of distributing remaining liquidity from the transaction,

as well as the cancelled dividend based on the 2019 financial statements, in the

near future, as soon as the uncertainty e.g. related to the Covid-19 pandemic

has been resolved.

ABG Sundal Collier and the law firm Schjødt served as, respectively, Veidekke's

financial and legal advisers in the process. The consortium's advisers were

Arctic Securities, DNB Markets, PWC, the law firm Thommessen in Norway, and the

law firm Vinge in Sweden.

Analysts and investors are invited to attend a short video conference today at

16:00 CET. There, CEO Jimmy Bengtsson and other members of Veidekke's management

team will briefly outline the transaction and answer questions. The video

conference will be conducted in Norwegian, without translation.

To dial in:

Join the meeting: https://pexip.me/meet/7263771052

Phone: +47 67209300

PIN: 7263771052 #

One-click smartphone dial-ins: + 4767209300,7263771052 #

For more information, contact:

Jimmy Bengtsson, Group CEO, ph. +47 984 70 000, jimmy.bengtsson@veidekke.no

Jørgen Wiese Porsmyr, EVP, +47 907 59 058, jorgen-wiese.porsmyr@veidekke.no

Lars Erik Lund, EVP, ph. +47 413 31 369, lars.lund@veidekke.no

Bård Schumann, ph. +47 940 80 000, baard.schumann@gmail.com

Tollef Svenkerud, Chairman Fredenstad Bolig, +47 917 76 594,

tollef@fredensborgbolig.no

Veidekke press photos  (https://veidekke.fotoware.cloud/fotoweb/archives/5028

-Pressebilder-Veidekke/)

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This information is subject to the disclosure requirements pursuant to section 5

-12 of the Norwegian Securities Trading Act.

Veidekke is one of Scandinavia's largest construction and property development

companies. The company undertakes all types of building construction and civil

engineering contracts, develops residential projects, maintains roads, and

produces asphalt and aggregates. The company is known for its involvement and

local knowledge. Its annual turnover is NOK 39 billion, and half of its 8,600

employees own shares in the company. Veidekke is listed on the Oslo Stock

Exchange and has always posted a profit since it was founded in 1936.