First step in capital transfer: SEK 5 biliion to shareholders by redeeming every tenth share for SEK 400

FIRST STEP IN CAPITAL TRANSFER: SEK 5 BILLION TO SHAREHOLDERS BY REDEEMING EVERY TENTH SHARE FOR SEK 400

Share redemption proposal

Today Skanska AB has decided to propose a voluntary redemption of every tenth share in Skanska by issuing redemption rights.

Motives for the proposal

By recently divesting its shares in the cemented carbide and specialty steels company Sandvik, Skanska substantially increased its financial liquidity and completed the process of focusing on its core operations announced by the Board of Directors and underway for several years.

After the dividend proposed at the Annual Meeting of shareholders, the distributable earnings available in Skanska AB total SEK 6,676 million. Consequently, the entire transfer of SEK 8-10 billion in excess capital that Skanska has promised its shareholders cannot be implemented at one time.

After completion of the share redemption program that it is now proposing, the Board intends to propose an additional transfer of capital to Skanska shareholders, which will probably be implemented in conjunction with the Annual Meeting in 1998.

Terms and implementation

For each Series A or Series B share in Skanska, shareholders will receive one redemption right. Ten redemption rights will entitle the holder to redeem one Skanska share of either series in exchange for SEK 400 in cash.

The Board also proposes that it be authorized to carry out a new share issue, with a deviation from shareholders’ preferential rights of subscription, equivalent to the par value of redeemed shares but not to exceed SEK 126 million. In addition, the intention is to at least restore the capital stock of Skanska by approving a bonus issue. By taking these steps, Skanska will not need court permission to register the resolution to reduce the capital stock. It will thereby avoid the time-consuming procedure of notifying known and unknown creditors.

Timetable

An extraordinary meeting of shareholders on May 23, 1997, will decide whether, in principle, to approve the share redemption proposal and authorize the Board to implement the new share issue.

According to the proposal, those who are registered as shareholders on the date of record, May 28, 1997, will receive Skanska redemption rights. Consequently, effective from May 26, Skanska shares will be quoted on the Stockholm Stock Exchange exclusive of the value of this redemption right. According to plans, trading in redemption rights will take place during the period June 3-27 and the application period for share redemption will be June 3 to July 2.

The intention is that at a second extraordinary meeting, intended to be held on August 4 1997, the shareholders will adopt a final resolution to redeem and reduce the capital stock. It will also adopt a resolution approving the bonus issue, thereby increasing the par value of each Skanska share from SEK 10 to SEK 12.

Provided that extraordinary meetings as described above decide in accordance with the proposal of the Board and that the decisions are registered with the Swedish Patent & Registration Office, it is estimated that payment can be effected late in August.

Simplified selling procedure

Skanska intends to arrange a procedure which would mean that shareholders will be offered a simple method for selling a limited number of redemption rights.

Financial effects

If the redemption proposal is fully accepted, it will decrease the number of Skanska shares by 12,592,386 to 113,331,474 before the planned new share issue. Based on final 1996 figures and adjusted for the effects of the redemtion and the new share issue, earnings per share would increase from SEK 31.60 to SEK 33.90, while reported shareholders’ equity per share would decrease from SEK 113.60 to SEK 83.70.

The financial position of the Skanska Group would remain strong, with a 24.0 percent pro forma equity/assets ratio as of December 31, 1996, compared to a 31.6 percent equity/assets ratio before the redemption (before taking into account the surplus value of real estate and shareholdings).

Information

Further information will be presented in an information brochure that will be published in late May and distributed together with a redemption application form to the shareholders of Skanska AB in early June 1997. Information can also be requested from Skanska AB and will be available at the branches of Skandinaviska Enskilda Banken.

Danderyd, May 5, 1997

SKANSKA AB

Group Public Affairs

This and previous releases are also available on http://www.skanska.se