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Press release

Determination of the Acquisition Cost of Cargotec and KONE Shares, and the Subscription Price of Option Rights

6/9/2005

Kone Corporation demerged into two new listed corporations, Cargotec Corporation and KONE Corporation, on 1 June, 2005. The acquisition cost for Cargotec and KONE shares, and the subscription price of the respective option rights are determined as follows:
 
Acquisition Cost of Shares
 
According to the advance ruling from the Finnish Central Board of Taxation, the acquisition cost of Cargotec and KONE shares is considered to be the part of the acquisition cost of Kone Corporation's shares that correspond to the proportion of the net assets of Kone Corporation transferred to Cargotec and New KONE. If it is apparent that the proportion of the net assets of Cargotec and KONE substantially differs from the proportion of the current values of Cargotec and KONE shares, the proportion of the current values is used as the basis for dividing the acquisition cost between the shares. In this case, the average weighted trading price of the first trading day on 1 June, 2005, or secondarily the corresponding value of the first five trading days, if the latter is considered to better reflect the shares' current values, can be considered as the current value of the shares.
 
The proportion of net assets transferred to Cargotec and KONE will be determined in the final settlement of the dissolved Kone Corporation, which will be published at a later date. The other two alternatives for determining the acquisition cost are the following:
 
Proportion based on first day's average weighted trading price:     
Cargotec Corporation: 35.51%
KONE Corporation: 64.49%           
           
 
Proportion based on first five day's average weighted trading price:
Cargotec Corporation: 35.34%     
KONE Corporation: 64.66%           
     
 
The final determination of the acquisition cost will be made by the tax authority of the shareholder.
 
Subscription Price for Shares with Cargotec and KONE Option Rights
 
The subscription price for shares in dissolved Kone Corporation with option rights was EUR 24.67 per share. The subscription prices for Cargotec and KONE option rights have been determined according to the proportion of the market values of Cargotec and KONE shares as follows:
 
The subscription price of Cargotec 2005 A and 2005 B option rights is EUR 8.59 per share.
The subscription price of KONE 2005 A and 2005 B option rights is EUR 16.08 per share.
 
The calculated market value for the Cargotec share, EUR 23.64, and for the KONE share, EUR 44.25, are based on the weighted average trading price in the period 2-8. June, 2005. Three shares in the respective corporation can be subscribed with each Cargotec and KONE 2005 A and 2005 B option right.