Stmnt re Loan Facilities

RNS Number:3259L
Kvaerner ASA
9 October 2001


Kvaerner results and loan covenants

LONDON, 9 OCTOBER 2001: Kvaerner today announced that the Group's lenders have
appointed a task force to work closely with the Kvaerner Board and management
in all aspects of the refinancing of the Group.  A plan has been agreed for
the analysis and discussions required in the preparation of the necessary long
term loan facilities.

A key element in the preparation of financial data is the Group's reporting of
its third quarter result.  Although the review of the Group's third quarter
performance is in its early stage, it has become evident to the Board that
disputes over two projects in the Group's Pulp & Paper division, as well as
continued weak results from certain segments in the E&C area, will result in
third quarter results being lower than expected.  With this development it can
not be excluded that the Group will be in breach of its financial covenants at
the end of the third quarter.  In light of this possibility the Group has
entered into a dialogue with the Group's lenders to agree a suspension of the
financial covenants should such breach occur. 

The two projects in the Pulp & Paper portfolio that have caused a
deterioration in the results of the division in the third quarter, are for
customers in Asia and Australia.  In Asia, a performance dispute over two
power boilers contracted in 1994 by Kvaerner Pulping Oy (then Tampella Power
Inc.) led to arbitration proceedings which began in 1998.  Contrary to the
expectation of the Group and its legal advisers, preliminary declaration of
the arbitration panel has ruled against Kvaerner.  The second project in
question is related to a contract signed in the first half of 1998 for the
construction of two chlor-alkali plants in Australia.  One of the two plants
has experienced severe costs and schedule overruns due to union initiated
industrial actions which are expected to lead to a loss to be booked on the
project.

In connection with the discussions with the banks, the Group on 13 September
presented the following operating profit forecast for the year:

Group NOK 918 million (including sales gains of NOK 150 millions)

E & C                     NOK   224 million
Oil & Gas                 NOK   424 million
Shipbuilding              NOK   184 million
Pulp & Paper              NOK    54 million
Other mechanical          NOK - 118 million

For the Group as a whole an operating result of NOK 1.7 billion is forecasted
for 2002 and NOK 2.2 billion for 2003.


For more information: 
Senior Vice President Group Communications Trond Andresen: telephone 07770
856550 or Vice President Marit Ytreeide: telephone [phone].