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Terex Buys More Tatra Shares

Wed September 24, 2003 - Northeast Edition
CEG



Terex Corporation announced Sept. 3 that it has acquired an additional 51 percent of the outstanding common shares of the Czech Republic company Tatra a.s., an internationally recognized manufacturer of on/off-road heavy-duty vehicles for commercial and military applications with 2002 revenues of approximately $138 million.

The acquisition brings Terex’s total ownership in Tatra to approximately 71 percent Terex purchased the additional shares from SDC International Inc.

“We view Tatra as an integral part of our ongoing military strategy,” commented Ronald M. DeFeo, chairman and chief executive officer of Terex.

“We knew when we initially invested in Tatra as a minority shareholder that the company needed to be restructured.

“Tatra needed greater working capital funding in the near term than prior ownership was able to provide, which has led to our recent decision to acquire the additional equity.

“The acquisition announced today makes Terex the controlling shareholder of Tatra, which was a requirement for Terex providing Tatra with the additional working capital funding necessary to take the restructuring actions required.

“While the current Tatra board of directors and supervisory board will not change, Fil Filipov will become the chairman of the supervisory board. Mr. Filipov will also continue as president of Terex Cranes.”

DeFeo continued, “In addition to the military opportunity, we also see Tatra as an excellent low-cost engineering and fabrication resource, and as an entree to developing markets that many of our businesses can capitalize on.

“The consideration for the incremental shares consisted primarily of the forgiveness of debt [approximately $8.5 million] and the issuance of approximately 209,000 shares of Terex common stock.

“We anticipate that Tatra will be earnings neutral in 2003 and will add approximately 5 cents to earnings per share in 2004.

“As Tatra and Terex are each one-third owners in the American Truck Company LLC military and specialty truck joint venture, which recently was selected as the preferred bidder for 315 medium tactical trucks for the Ministry of Defense of Israel, Terex will now participate in two-thirds of this venture and will consolidate ATC’s results with that of Terex for financial reporting purposes.”