- FOCUS ON CORE BUSINESS
- DEBT TO BE REPAYED FROM COMPANY ASSETS AND OPERATIONAL PROFIT
On 21 February 2003, the Supervisory Board appointed a new management team to lead the Company. After reviewing the financial condition of the Company, its commercial operations and assets, the team has concluded that although Getronics is experiencing a very difficult market, the underlying fundamentals of the Company are in better shape than originally thought. In particular, client loyalty has proved to be stronger than expected. Getronics has a very satisfied blue chip client base, strong strategic relationships with leading technology partners - including Microsoft, Cisco and Dell - skilled and service orientated employees, and the ability to deliver high quality ICT services. The healthier condition of the Company, together with management action to execute the many opportunities to improve operational performance and cash management, and a strengthened focus on core business, have led management and the Supervisory Board to conclude that there is a more attractive route for the Company than the Revised Invitation To Tender for strengthening its financial position.
While keeping the existing credit facility in place, management has drawn up a plan to improve the operational performance and cash generating capability of the Company’s core activity. It includes the following actions:
- Getronics’ focus will remain on its core business of the end-to-end integration and management of Information and Communication Technology (ICT) systems. Getronics’ solutions and services span the needs of its clients and support the processes and infrastructure that are crucial to their business success.
- Divestment and/or liquidation of non-core and structurally under-performing assets.
- The implementation of a centralised cash management system to deliver a strongly cash focused company, which has already resulted in a stable cash position.
- Under-performing country operations will be turned around, starting with the Company’s Italian subsidiairy. Mr Roberto Schisano, formerly of Texas Instruments, was appointed Chairman of Getronics Italy on 20 March to address operational performance issues. Mr Schisano will lead the rethinking of its strategy and service delivery so that the subsidiary’s leading market position in Italy is reinforced.
- A continuing review of the Company’s business strategy to refine its market positioning and to examine the benefits of aligning with strategic partners in order to strengthen core activities, geographic coverage and capacity.
As part of the review of its assets, the Company has concluded that the Getronics Human Resource Solutions (GHRS) business unit is non-core. Getronics has already received serious offers for GHRS and expects to complete the disposal in the coming months. GHRS will have more freedom to develop outside of Getronics and its strategic position will be enhanced by a new partner. (During FY 2002, it contributed approximately EUR 95 million and approximately EUR 35 million to the Company’s revenue and EBITA respectively).
The net proceeds from the divestment of non-core and under-performing assets will be used for the repayment of debt, including bank debt. Approximately EUR 300 million in cash will be set aside for the repayment of the subordinated Bonds. In the next two years, management will focus on cash generation from improved operational performance to repay nominal debt, including its obligations to the 2004 and 2005 Bondholders.
Revised Invitation To Tender
Management and the Supervisory Board clearly prefer the alternative route consisting of the steps, as outlined above, to the Revised Invitation To Tender, taking into account the overall interest of the Company and its stakeholders. Accordingly, management and the Supervisory Board would prefer to terminate the Revised Invitation To Tender. However, management and the Supervisory Board have decided not to terminate the Revised Invitation To Tender (unless there are unforeseen or exceptional circumstances and provided that an acceptable level of Exchange Offers are tendered), in order to allow the shareholders to take the proposed alternative scenario into account at the Extra-Ordinary General meeting of Shareholders scheduled to take place on 27 March 2003.
Statement from the Management of Getronics:
“As the new management of Getronics, our first step has been to fully consider the best options for the Company, including a long-term financing solution, and to recommend and implement the most successful future path, taking into consideration the interests of the Company and all its stakeholders. With the agreement of the Supervisory Board, we have now put in place a financial solution that will significantly reduce the Company’s debt level, lead to a significant improvement in the solvency ratio of the Company, and restore the confidence of clients and the financial markets. We are now back on track.”
ABN AMRO Corporate Finance is acting as financial adviser to Getronics.
About Getronics
With approximately 25,000 employees in over 30 countries, Getronics is one of the world’s leading providers of vendor independent solutions and services to professional users of Information and Communication Technology (ICT). Through consulting, integrating, implementing and managing Infrastructure Solutions and Business Solutions, Getronics helps many of the world’s largest global and local organisations to maximise the value of their technology investment and improve interaction with their customers. Getronics’ headquarters is in Amsterdam, with regional head offices in Boston and Singapore. Getronics’ shares are traded on Euronext Amsterdam (‘GTN’). For further information about Getronics, visit www.getronics.com
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Legal notice
This press release is not an offer of securities for sale in the United States or any other jurisdiction. The Existing Bonds, the new Ordinary Shares and the Warrants have not been and will not be registered under the U.S. Securities Act of 1933, and may not be offered or sold in the United States absent registration or an exemption from registration. There will be no public offering of such securities in the United States.
The Revised Invitation to Tender is not being made, directly or indirectly, in or into the United States, or by the use of the mails, or by any means or instrumentality (including, without limitation, facsimile transmission, telephone and the Internet) of interstate or foreign commerce, or of any facility of a national securities exchange, of the United States and the Revised Invitation to Tender cannot be accepted by any such use, means or instrumentality or from with the United States. For the purposes of this press release, “United States” means the United States of America, its territories and possessions, any State of the United States and the District of Columbia.
This press release is being distributed by the Company only to, and is directed at (a) persons outside the United Kingdom; (b) persons falling within Article 43 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (the “Order”); or (c) other persons to whom this announcement may lawfully be communicated in accordance with the Order (together, “relevant persons”). Only relevant persons may participate in the Revised Invitation to Tender. Any person who is not a relevant person should not act or rely on this press release or any of its contents.
Statutory seat Amsterdam
Trade register 33.125.469 Amsterdam-Haarlem