Cardo closes sale of Rail

9/25/2002 4:26 AM EST

On July 24 this year, Cardo entered into an agreement on the sale of the
Cardo Rail business area to Vestar Capital Partners. The conditions for
the deal have now been met and the sale closed. The selling price is
approximately SEK 2 billion for the company free from debt, generating a
tax-free capital gain of approximately SEK 345 million.

The deal was subject to the approval of the competition authority and to
Vestar receiving final financing. Both conditions have been met, and as
of September 24 2002 Vestar is taking over Rail's business through a
company newly established for the purpose.

"I am very pleased that we have now closed the sale of Rail. We are
gaining a strong balance sheet and freeing up capital for an expansion
in Door and Pump, which both operate in sectors with considerable
aftermarket potential and good growth opportunities via acquisitions,"
says Cardo's president and CEO Kjell Svensson.

The selling price is approximately SEK 2 billion for the company free
from debt. The capital gain of approximately SEK 345 million, which is
equivalent to earnings per share of approximately SEK 11.50, will be
accounted for during the third quarter.

The selling price has been paid by the purchaser taking over existing
loans within Rail, paying approximately SEK 1.2 billion cash for the
shares and issuing a warrant that gives Cardo the right at any time
prior to December 31 2020 to acquire approximately 5 percent of the
shares in the acquiring company at their nominal value. The present
value of the warrant has been estimated at SEK 10 million.

Basing calculations on the previous year's earnings, and computing
interest on proceeds of the sale, the whole-year effect of the sale of
Rail would have resulted in a reduction of group earnings per share by
slightly more than SEK 1.

After the sale, Cardo is estimated to have net liquid funds of
approximately SEK 500 million and an equity ratio of slightly more than
60 percent.

Malmö, Sweden, September 25 2002

Cardo AB (publ)

For further information, please contact:
Kjell Svensson, President and CEO, phone +46 40 35 04 53, +46 40 35 04 00
Göran Axeheim, Executive Vice President and CFO, phone +46 40 35 04 42,
+46 40 35 04 00
Christer Roskvist, Head of Public Relations, phone +46 40 35 04 25,
+46 40 35 04 00