In the past months a strategic review of the company and its business units has been conducted. The conclusion is that the Dutch activities are healthy and have strong market positions. Continuity of these business units was secured by separating them legally and financially from the other parts of the group.
These business units will operate under the name Ballast Nedam Nederland B.V. The winding down of the international activities will continue (until 2005). All expected losses were taken in 2002. Funding has been secured with the banks.
Offer for Dutch Activities
Over this past weekend, a financial party has submitted an offer for the Dutch activities with the intention to continue these activities under the Ballast Nedam name. This offer is being evaluated by the Board of Management and the Supervisory Board and will obviously be reviewed in comparison with other available options. As soon as a decision has been reached, it will be presented to the shareholders.
International Projects Market
Last July Ballast Nedam decided to withdraw from the risky and structurally loss making international projects market. This has led to a far-reaching reorganization that is progressing as planned. The business unit Ballast Nedam International will cease to exist after completing the current five projects.
Recapitalisation of Ballast plc
Recapitalisation of Ballast plc has taken place thereby enabling the business unit to operate as an independently funded company. In line with earlier announcements, Ballast Nedam plans to leave the UK market over time. The loss making Southern regions have been downsized to about a quarter of their previous turnover. Ballast Plc is expected to return to profitability in the current year.
As usual, the final full year 2002 figures will be presented in March. The Board of Management estimates the loss at Euro 135 Ã¢â¬" 150 million. A previously unexpected major item is a Euro 40 million provision for the Ballast Nedam Dutch pension fund. Because of the decreased value of its investments in equity, the fund is under funded. Although this relates to future obligations, a provision to raise the funding level to 100% has now been made. At the time of the disclosure of the 2002 half year figures the loss was estimated at Euro 105 million excluding possible provisions for restructuring the international activities. These additional provisions will be for an amount between Euro 50 million and Euro 65 million. They relate to the winding down of the international division, the financial settlement of international projects (claims and outstanding payments) and the reorganization of the UK activities.
The measures taken are necessary to secure the continuity of the company. The decisions that have been made to fund the Dutch activities on an independent basis provide the security and financial latitude to further develop the company as a large player on the Dutch market. It is a logical choice, not only for the benefit of Ballast Nedam´s shareholders, but also from the point of view of the responsibility towards Ballast Nedam´s employees and to restore client confidence.