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Elcoteq SE Elcoteq SE Stock Exchange Release June 24, 2008 at 5 pm (EET)
ELCOTEQ'S DIVESTMENT OF ITS SUBSIDIARY IN ST. PETERSBURG WILL NOT BE COMPLETED
On February 25, 2008, Elcoteq signed an agreement with Flextronics International GmbH to divest the Elcoteq subsidiary ZAO Elcoteq and its plant in St. Petersburg, Russia. Among the conditions precedent for the closing of this transaction were that the purchaser would obtain the approval of the transaction by the Russian competition authorities, and that the purchaser would be able to close the negotiations related to certain specific issues with the Russian customs authorities. As these conditions were not met by the deadline stated in the agreement, Flextronics decided to use its right to terminate the transaction. Flextronics has paid Elcoteq non-refundable compensation of one million euros in accordance with terms in the transaction agreement relating to non-completion.
Elcoteq is continuing with its plan to divest the St. Petersburg plant and is discussing with new parties to this effect. The demand in the Russian real estate market is currently at a high level and prices are rising.
At the same time Elcoteq continues negotiations with the Russian authorities concerning certain customs practices and will re-assess its long-term strategy in Russia based on these discussions. Demand for home communications related electronics manufacturing services in the Russian market is promising provided that the customs practices will change.
ELCOTEQ SE
Minna Aila Director, Investor Relations and Corporate Responsibility
Further information:
Markus Kivimäki, SVP, Legal Affairs, tel. +358 10 413 1248 Mikko Puolakka, CFO, tel. +358 10 413 11, mobile +41 79 618 0302
About Elcoteq Elcoteq SE is a leading electronics manufacturing services (EMS) company in the communications technology field. Elcoteq's global service offering covers the entire lifecycle of products, from product development to after-market services. By further combining mechanics expertise into its service offering, Elcoteq's vision is to be a leading integrated electronics manufacturing services (IEMS) company. Elcoteq provides global end-to-end solutions consisting of product development services, supply chain management, NPI, manufacturing, and after-market services for the whole lifecycle of its customers' products. These products include Personal Communications products such as mobile phones and their parts, Home Communications products such as set-top boxes and electronics for flat screen TVs as well as Communications Networks products such as base-stations, tower-top amplifiers, and microwave systems.
Elcoteq operates in 15 countries on four continents and employs some 24,000 people. The Group's consolidated net sales for 2007 totaled 4.0 billion euros. Elcoteq SE is listed on the OMX Nordic Exchange Helsinki. For more information visit the Elcoteq website at www.elcoteq.com.
