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IWKA successfully places EUR 69 million convertible bond issue

After having almost completed the restructuring of its portfolio, IWKA is focusing on growing its core businesses

24 avril 2006

Continued growth will be based in part on an optimised Group financing structure. As such, IWKA placed a convertible bond in the capital markets today. In addition, the Group will restructure its current primarily short-term bank liabilities into a long-term bank financing. Furthermore, the Executive Board and the Supervisory Board will seek authorisation for additional capital at the forthcoming Annual General Meeting.

Convertible bond

Today, IWKA placed EUR 69 million convertible bonds. The issue was significantly oversubscribed and was placed with investors in half an hour only. The bonds will be issued by the company's 100%-owned subsidiary IWKA Finance BV, Netherlands, guaranteed by IWKA Aktiengesellschaft. IWKA conducted the offering to take advantage of the current attractive environment in the convertible bond market. This is an important step toward optimizing the company's financing structure.

The bonds are convertible into new common shares of the company representing 10 % of the company's current issued share capital. Shareholders' subscription rights are excluded. The coupon on the bonds is 3.75 % p.a. The conversion premium is 20 % above the reference price. The bonds, which mature in 5 1.2 years, are senior, unsecured obligations and will be listed on the EuroMTF segment of the Luxembourg Stock Exchange. Settlement is expected on May 9, 2006.

With the placement, IWKA has successfully completed a key step in its plan for a long-term refinancing of the company. Dresdner Bank Aktiengesellschaft has acted as sole bookrunner and lead manager and Landesbank Baden-Württemberg as co-lead manager of the offering. The convertible bonds have been placed exclusively with institutional investors outside the United States of America (Regulation S). In the course of the placement, Dresdner Bank Aktiengesellschaft has placed shares of IWKA Aktiengesellschaft held by individual institutional investors with other institutional investors.

Long-term bank financing

IWKA Aktiengesellschaft intends to sign an agreement with a banking group for financing with a tenor of five years. These long-term cash and letter of credit facilities will replace the current short-term financing facilities.

The convertible bonds and the planned bank financing will enable IWKA to secure the long-term financing of its organic growth.

Authorised capital

The Executive and Supervisory Boards will propose to the annual general meeting to be held on June 1, 2006, the authorisation of issuing additional shares of up to 50 % of current total share capital, which would amount, in aggregate, to total authorised share capital of EUR 34.5 million.

The proposal is being made to ensure that the company is able to act in the event it sees strategic acquisition opportunities in the future. However, at the present time, there are no specific projects.

About IWKA: IWKA is a globally operating automation group in the mechanical and plant engineering sector for the automotive, robotics and packaging industries. The company has 11,350 employees and in 2005 generated sales revenues of approximately EUR 2.1 billion.

This document does not represent an offer for the acquisition of either convertible bonds or shares in the United States. Neither does it constitute a solicitation for offers to purchase convertible bonds or shares in the United States. The convertible bonds (the "Convertible Bonds") and the shares (the "Shares") of IWKA Aktiengesellschaft may not be offered or sold in the United States or to United States persons or any person acting on behalf of United States persons (as defined in the currently applicable revision of Regulations S of the American Securities Act of 1933 (the "Securities Act")), unless they are registered or exempted from the obligation to register as stated in the Securities Act. The Convertible Bonds and Shares are not and will not be registered in accordance with the Securities Act. An offering for convertible bonds or shares could be placed in the United States solely on the basis of a prospectus and detailed information about IWKA Aktiengesellschaft and its management and financial statements.