ad hoc

SKW Stahl-Metallurgie Holding AG: 51%-Participation in Bhutan filing petition for insolvency proceedings – Positive EBITDA –one-off effect in the middle range of single figure millions of euros

Unterneukirchen (Germany), December 18, 2015. SKW-Tashi Metals & Alloys Private Ltd., Phuentsholing (Bhutan), a 51% participation of SKW Stahl-Metallurgie Holding AG, Unterneukirchen (Germany), ISIN DE000SKWM021, today acknowledged to the competent Bhutanese Court its inability to make payments and filed a petition to begin insolvency proceedings according to local law.

Already in 2014 the following comprehensive depreciation measures were carried out simultaneously: on the level of SKW Stahl-Metallurgie Holding AG, the book value of the investment in the Bhutanese company as well as loans and receivables to the company; on the level of SKW-Tashi Metals & Alloys Private Ltd., all tangible assets. The Bhutanese company’s insolvency will thus not result in any meaningful need to adjust values.

Moreover, the Bhutanese shareholding has been classified in the SKW Metallurgie Group since the financial statements for H1-2015 as “non-current assets held for sale (IFRS 5)”; hence its financial figures are no longer contained in corporate revenues and EBITDA.

However, Group EBITDA in Q4-2015 will be, as announced, impacted by positive one-off effects from the full deconsolidation of the Bhutanese company; these non-cash effects are expected to be in the middle range of single figure millions of euros.

The joint liability of SKW Stahl-Metallurgie Holding AG was reduced to a guarantee in the amount of USD 0.6 mill. for a loan to the Bhutanese company; no other significant cash effects are expected.

For quite some time, the Bhutanese company has not made any significant deliveries to companies of the SKW Metallurgie Group; hence the security of supplies to the Group will not be impacted.