Subject: [NEXTEL-1] Ericsson boss resigns - debt ratings on downgrade alert

From: Marcel <[email-masked]>
Date: Fri, 07 Feb 2003 13:11:40 -0500

Posted to the site on 07-Feb-03

Ericsson boss resigns - debt ratings on downgrade alert

Ericsson's CEO and President Kurt Hellström is to step down after this year's AGM. He is
being replaced by Carl-Henric Svanberg, who will continue to share the position of CEO and
President. Svanberg is presently CEO for the international lock group Assa Abloy.
Hellström will stay with the company until year-end in order to secure a successful hand
over. Hellstrom became president of Ericsson in 1999 and CEO from the start of 2001.
"Kurt Hellström has decided to make use of his possibility to retire at the age of 60,"
says Michael Treschow, Ericsson's chairman of the Board. "I am pleased to announce a very
competent successor to Kurt Hellström today."
Carl-Henric Svanberg has successfully led Assa Abloy into becoming the world's leading
lock maker. He has turned the company into a highly efficient organization while
distinguishing himself for his excellent leadership skills.
"He will continue Kurt Hellström's successful work in controlling Ericsson's costs, while
keeping up our leading market position," says Michael Treschow. "Carl-Henric Svanberg will
keep the same focus as Kurt Hellström, namely to make Ericsson return to profit, cut costs
and to strengthen our leading position."
"After 18 years with Ericsson, of which almost four were as President, I am very confident
in handing over to Carl-Henric Svanberg," says Kurt Hellström, Ericsson's CEO and
President. "The telecom industry is going through tough times, but it is a fundamentally
strong industry with good growth potential."
Ericsson's shares jumped sharply on the news, but settled down to end the day up over 4%.
Meanwhile, the debt ratings agency, Moody's Investors Service has also said that it has
now placed on review for possible downgrade, Ericsson's Ba2 bond and senior implied
ratings respectively. The Not-Prime rating of Ericsson for short-term debt has been
confirmed.
In its rating review, Moody's says that it will focus on the various scenarios for
Ericsson's future revenue and cost profile, as well as the likely time frame for a return
to positive cash flow generation from its core business, mobile network systems, and the
company's financial flexibility through this period. The rating agency expects to conclude
the rating review shortly.

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