Electrolux 1996 Annual Report Download - page 30

Electronics, which had sales of approxi-
mately SEK 250m and about 190 employees.
In February, 1997, a preliminary agree-
ment was reached on divestment of the
operation in sewing machines, which has
annual sales of approximately SEK 850m
and about 700 employees. The divestment
is scheduled for completion on March 31,
and is expected to generate a capital gain
of approximately SEK 600m for the Group.
Distribution of Gränges to shareholders
The Board of Directors has decided to
present a proposal to the Annual General
Meeting for distribution of all shares in
the wholly-owned subsidiary Gränges to
Electrolux shareholders. The operation in
which shares will be distributed according
to the proposal does not include the
Recycling business area, which has been
transferred to Electrolux as of 1997. The
shares in Gränges will be transferred to
AB Electrolux from the Contracting hold-
ing company prior to the Electrolux
Annual General Meeting. It is intended
that Gränges will be listed on the Stock-
holm Stock Exchange in connection with
the distribution of shares.
For each share in Electrolux, either
A- or B-shares, the shareholder will receive
1/2 of a share in Gränges. Two shares in
Electrolux thus entitle the holder to one
share in Gränges. An odd fractional share
accruing to a shareholder will be sold auto-
matically for cash, free of brokerage com-
mission. It is intended that shareholders
with a maximum of 99 shares in Electrolux,
thus receiving up to 49 shares in Gränges
as of record day, will be offered an arrange-
ment for selling their shares in Gränges
free of brokerage commission, after Gränges
has been listed.
A prospectus with additional informa-
tion will be sent to Electrolux shareholders
prior to the Annual General Meeting on
April 29. If the proposed distribution is
approved, May 20 will be proposed as
record day for receiving shares in Gränges,
which will then be listed on the O-list as
of May 21.
In response to a request from Electro-
lux, the Swedish Tax Board has indicated
that the Swedish fiscal legislation known
as “Lex Asea” should be applicable to the
distribution of shares in Gränges, which
means that there will be no immediate
fiscal consequences for Electrolux share-
holders in Sweden, or for Electrolux.
The distribution of Gränges shares
would reduce the Electrolux Group’s
shareholders’ equity by SEK1,783m and the
parent company’s equity by SEK 1,602m.
The Group’s total assets would be reduced
by SEK 5,594m. The net debt/equity ratio
would amount to 0.81, as against 0.80 at
year-end 1996.
For additional information, see page
20. The prospectus will be available at all
offices of Skandinaviska Enskilda Banken
in Sweden. It will also be available from
Electrolux, tel. [phone], and from
Gränges, tel. [phone].
Discontinuation of joint venture
in FHP Motors
As of September 1, 1996, the Group and
AEG AG dissolved the joint venture for
small electric motors in FHP Motors GmbH,
which was originally established in 1990.
Electrolux has taken over the operation
within this venture for manufacture and
sale of motors intended primarily for house-
hold appliances. In 1996 this operation
had sales of approximately DEM 400m
(approximately SEK 1,800m) and about
2,300 employees, and has been integrated
in the compressors product line, which is
now called components.
TEMIC Telefunken Microelectronic
GmbH, which has taken over AEG’s share
of the joint-venture company, took over
the operation for manufacture and sale of
electric motors for the automotive indus-
try. This operation had sales of approxi-
mately DEM 150m in 1996 and about
430 employees.
Operations in new markets
In January, 1996, the Group acquired 41%
of the ordinary shares in the Brazilian com-
pany Refrigeração Paraná S.A. (Refripar)
for USD 50m. A public bid in April, 1996,
enabled the Group to acquire another
46.6% of the ordinary shares for USD 84m.
Together with the 10% of the ordinary
shares and the 6% of the preferential shares
acquired in 1994, on April 30 the Group
thus owned 97.6% of the ordinary voting
shares and 35% of the share capital. Elec-
trolux acquired additional shares in the
company by merging it with two wholly-
owned subsidiaries, Electrolux Ltda and
Oberdorfer S.A. As of November 1, 1996,
the Group owned 99% of the voting shares
and more than 50% of the share capital in
Refripar. The company is included in the
Group accounts as of February, 1996.
Refripar is the second largest white-
goods company in Brazil, with sales of BRL
800 million (approximately SEK 5,300m)
in 1996 and about 5,000 employees.
In January, 1996, a majority-owned
joint venture was established in China for
production of refrigerators and freezers for
commercial users. In February, 1996, the
Group acquired 20% of the shares in Atlas
Eléctrica S.A. in Costa Rica, the leading
producer of refrigerators and cookers in
Central America. On April 1, the Group
acquired a small producer of commercial
appliances in Indonesia.
Employees
The average number of Group employees
in 1996 was 112,140 (112,300), of whom
13,920 (14,949) in Sweden. At year-end, the
Group had 110,200 (111,015) employees.
Acquisitions resulted in an increase of
8,245 employees, most of them in Refripar
and the electric-motor operation in FHP
Motors. Divestment of operations involved
a decrease of about 1,400 in the number
of employees, most of them in the Con-
structor group.
Of the total average number of
employees in 1996, about 11,100 (12,000)
were in the Group’s direct-sales operation.
Most of them work in Asia.
Information on the number of employ-
ees by country and region is given on
page 50.
Group operations
0
25,000
50,000
75,000
100,000
125,000
150,000
Average number of employees
Outside Sweden
Sweden
8887 89 90 91 92 93 94 95 96
The average number of employees in 1996 was
112,140, of whom 13,920 in Sweden.
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Electrolux Annual Report 1996