January 05, 2006

Questions and answers related to Rettig Group Ltd Bore's acquisition of Rederi Ab Engship

Q : Why this deal?

The operations and fleet of vessels fit well with the strategic thinking in Bore, especially together with the acquisition of BHC. The acquisition makes Bore more attractive in serving the needs of the Nordic market.

The parties have agreed to keep the purchase price private and confidential.

The acquisition will strengthen Bore's ability to serve the customers in the RoRo and small tonnage markets in the North Sea and the Baltic Sea.

The key customers are mostly the same Bore is serving today, Transfennica and UECC among others. The larger fleet will increase Bore's ability to meet the demand from its clientele.

We will continue with the offices in Turku, Mariehamn and Rotterdam

The Engship brand is well known in the market and no hasty changes will be made. In a situation like this, it follows naturally that the Bore brand will be strengthened and the Engship name will disappear over time.

It is too early to say, but the due diligence procedure will show. The thinking is to avoid over-lapping functions within the Bore Group and to integrate the operations into a bigger unit. There are a number of persons close to the retirement age both in the Bore and Engship organizations and their pension arrangements will be considered in this connection to guarantee a smooth transition period.

The shareholders, Mr Kaj Engblom, Chairman, and Mr Bengt Engblom, Managing Director, will leave the company.

Yes, the integration process will have effect on the whole Bore Group.

Bore will continue with offices in Rotterdam, Mariehamn and Turku. The company is managed by its CEO, Kaj Eriksson, who reports to the Bore Executive Committee.

No immediate actions in that respect are planned. The idea is to create a functional and efficient fleet, which responds to the demand of the existing market, considering the whole Bore Group of ships.

These are matters to be considered taking different cost structures into consideration. At present, the Bore fleet consists of ships under Finnish and Dutch flags and this pattern will continue.

Turnover will increase to EUR 70 - 80 million, with an increased profitability. The total personnel will become abt. 400 employees. The total number of vessels will be 21, out of which 11 are RoRo vessels and 10 container/multipurpose cargo carriers.

The acquisition brings more involvement in shipping by the owners, which does not mean less focus on the worldwide activities of RICC. The acquisition also makes the Business Areas more balanced now, especially in terms of capital employed.

Q : What next?

The shareholders in Rederi Ab Engship have agreed to sell their shareholding in the company. A due diligence process will be started immediately and it is the intention to complete the deal by the end of February 2006. Coordination and integration of the existing organisations will start after that with a focus on an efficient Bore Group organisation.

Now it is time to digest, integrate the operations and create an efficient team.