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The eBearing News
December 16, 2004
SKF Makes Financial Moves
copyright © 2004 eBearing Inc.
SKF AB (Sweden), the world's largest bearing manufacturer, made two moves designed to streamline
and internationalize its financial picture.
First, SKF made its final moves, in a plan announced over a year ago, to delist itself from
all but two of the equity exchanges where it once traded.
SKF B shares (each of which has 1/10 of a vote, vs. A shares which carry one full vote) had traded
on the London, Paris, Zurich, and Stockholm exchanges, while American Depository Receipts (ADRs) traded
on the U.S. NASDAQ (an ADR is a negotiable certificate issued by a U.S. bank; it represents a specific
number of shares of a foreign stock traded on a U.S. stock exchange).
Citing the globalization of trading and resulting low volumes on the secondary exchanges, SKF in 2003
began the process of withdrawing from all but the Stockholm exchange. The company said there is no
longer a need for local exchange listings for access to liquidity.
Stockholm (80%) and London (18%) historically carried virtually all of SKF's trading volume. Paris, Zurich and
NASDAQ, sharing the remaining 2%, have already been delisted.
SKF has now revealed a surprise decision to leave the London Stock Exchange.
The company said in its announcement, "The trading of SKF's shares on the London Stock Exchange is
negligible and therefore does not support a listing."
London trades are expected to be discontinued on January 20, 2005.
SKF has not severed its U.S. equity market ties, keeping B shares registered (but not traded) with the
U.S. Securities and Exchange Commission and maintaining its U.S. ADR facility.
In the second part of its financial streamlining, SKF announced it will be reporting its
financial results in accordance with International Financial Reporting Standards (IFRS). SKF currently
reports its financials under Sweden's Generally Accepted Accounting Principles (Swedish GAAP).
Accounting policies in accordance with IFRS will begin in 2005, with the report for
first quarter 2005 as the first IFRS report.
SKF said the impact of adjusting to IFRS will be minimal, both in terms of
reported financial results and the related reporting procedures and requirements.
For easier comparison to previous financials, SKF will offer financial results from
1Q2003 forward, recalculated under IFRS.
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- by Bruce A. Carr
from individual research,
tips and commercial sources.
Copyrighted material; unauthorized reproduction prohibited.
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