Hagemeyer N.V. EUR 1.5 bln financial restructuring successfully completed.

Yesterday the EUR 1.5 bln recapitalisation of Hagemeyer N.V. was successfully completed in a process which followed the signing on 15 January of new EUR 905 million credit facilities, restructuring of EUR 22.4 mln leases, the subsequent placement of 383 million(EUR 460 mln) via a rights issue and a EUR 150 mln subordinated convertible bond issue.

The new shares and bonds were successfully placed in the market. The terms of the underwriting did not require debt to be refinanced to be mandatorily converted into equity or convertible bonds.

Most of the existing EUR 1.27 bln debt involved in the settlement process was partly repaid and the balance converted into the new loans. The existing debt was a combination of bilateral loans from various banks around the world directly to operating companies in the Hagemeyer group and also bilateral, syndicated senior and subordinated bank loans as well as private placement debt to the parent and its Irish finance company.

The restructuring started in May 2003, when it became clear that Hagemeyer would not be able comply with the covenants of its existing financial debt, due to losses - especially its UK operations. This globe spanning exercise initially commenced by way of waivers and the creation of harmonised terms and conditions for those waivers issued by all lenders. Later these waivers were replaced by a formal standstill agreement with all parties.

Co-ordination groups of lenders were formed and under the standstill agreement a steering committee was appointed with representatives of all classes of lenders. Thus stability was created, to ensure continued commercial operation of the group and time was found for lengthy negotiations that were necessary to develop a refinancing solution acceptable to all. There were significantly different positions to overcome between the various individual financial creditors or creditor groups and also time was needed to investigate all possibilities for improvement of the net worth of the group, including a possible rescue by one or more outside parties. ABN AMRO was the co-ordinator during the whole restructuring process.

The new facilities of EUR 905 million have the following composition:

EUR 755 mln 3 year working capital facility (consisting of a EUR 650 mln revolving loan and a EUR 105 mln letter of credit facility);

EUR 150 mln 4 year amortising term loan facility

EUR 500 mln of the working capital facility will be drawn for refinancing purposes together with the term loan facility and EUR 150 mln of the working capital loan will function as stand-by for the purpose of general corporate financing needs, including restructuring costs.

The facilities will be borrowed primarily by the operating companies of the group and outstanding amounts will be determined by borrowing bases composed of receivables and inventory. The facilities are secured by intercompany receivables, selected subsidiary shares and account balances.

ABN AMRO acted as documentation, facility and security agent for the syndication. For more information reference is made to the prospectus of 16 January 2004.

The syndicate composition is as follows:

Mandated Lead Arranger & Co-ordinator: ABN AMRO

Co-Arrangers: ING Bank N.V., NIB Capital Bank N.V., Coöperatieve Centrale Raiffeisen-Boerenleenbank

Lenders:
Allstate Life Insurance Company, Banc of America Securities Limited, Banc of America Securities LLC, Banque LB Lux S.A., Barclays Bank PLC, Bayerische Landesbank, Beneficial Life Insurance Company, Berkshire Life Insurance Company of America, Credit Suisse First Boston, Deutsche Bank AG, Goldman Sachs International Bank, ING Corporate Investments, Massachusetts Mutual Life Insurance Company, Morgan Stanley & Co. International Limited, Nationwide Life Insurance Company, Nationwide Life and Annuity Company of America, Nationwide Life and Annuity Insurance Company, Nationwide Life Insurance Company of America, New York Life Insurance and Annuity Corporation, New York Life Insurance and Annuity Corp. Inst. Ownded Life Insurance Separate Account, New York Life Insurance Company, Newstart Factors, Inc., Pacific Life Insurance Company, Security Financial Life Insurance Co., Sun Life Insurance and Annuity Company of New York, Sun Life Assurance Company of Canada (U.S.), The Equitable Life Assurance Society of the United States, The Guardian Life Insurance Company of America, Wachovia Bank National Association Westpac Banking Corporation