Repositioning of Micronas nears completion (PR2)
February 5, 1999 - Micronas Semiconductor Holding AG
The forward-looking restructuring measures introduced by the Micronas Group are nearing completion. As part of the company's reorientation strategy, its Board of Directors and Executive Board have decided to sell a majority stake in Micronas Oy of Espoo (Finland), which specializes in products for analog telephony, to the local management with retrospective effect from 31 December 1998. The restructuring costs associated with this management buyout have been charged to the accounts for the 1998 business year. Even after taking this charge into account, however, the Micronas Group's annual loss for 1998 will remain within the CHF 50 million limit forecast at the last Annual General Meeting.
As part of the strategic repositioning, Micronas Semiconductor Holding AG of Zurich is aiming to concentrate its operations on core businesses. In line with this strategy, Micronas has decided gradually to reduce its production capacity for analog telecommunications technology. Accordingly, it is transferring its competence center for the development of analog telecommunications products, based in Espoo in Finland into new hands - while still ensuring that standards of performance and supply are maintained in full.
The imminent management buyout (MBO) represents an ideal solution for all concerned. The managers of the Espoo plant are taking over 81 percent of Micronas Oy's share capital while Micronas Semiconductor Holding will retain 19 percent. This division of ownership is tied to an agreement that the divested firm will still be able to make use - for an appropriate charge - of Micronas Group's sales organization and the testing facilities at Micronas Ltd. in Scotland. The approximately 140 employees who will be affected by the MBO will continue to work at Espoo.
The Management buyout in Espoo brings the restructuring of Micronas' telecommunications activities close to completion. The course is now set for a successful future. The financial statement for the first half of 1998 showed that the measures taken to reposition the Micronas Group had already begun to have an effect. This positive trend continued in the second half of 1998. As expected, the annual accounts for 1998 will be affected by one-off charges for restructuring costs. Despite this, the loss for the 1998 business year will not be higher than the CHF 50 million predicted last spring.
The way the business has performed over the last year confirms that the measures, which have already been implemented, were the correct ones. The 1998 annual results for Micronas Semiconductor Holding will be presented at a press conference on 19 March 1999 in Zurich.