Issue of convertible debenture loan and warrants to employees of Sandvik

Today the Board of Directors of Sandvik AB decided to propose to the Annual General Meeting, to be held on April 29, 1999, that permanent employees¹⁾ in the Sandvik Group in Sweden shall be offered to subscribe for convertible debentures in Sandvik AB and that permanent employees¹⁾ in the Sandvik Group in certain countries other than Sweden shall be offered to acquire warrants in Sandvik AB.

The Board of Directors proposes that the convertible debenture loan shall amount to a maximum of approximately SEK 1,000 M and that the term of the loan shall be from July 2, 1999, to June 30, 2004. The loan shall carry an annual interest rate corresponding mainly to the 12-month STIBOR minus 0.75 percentage points. The conversion price is proposed to correspond to approximately 125 per cent of the average market price for the Sandvik Series B share during the period April 15 to April 28, 1999. The subscription period is proposed to be during the period May 10 to May 26, 1999.

All employees in Sweden, to whom the offer is directed, shall be offered to subscribe for convertible debentures to amounts ranging between approximately SEK 10,000 to SEK 200,000.

Furthermore, the Board of Directors proposes an issue of a debenture loan with detachable warrants. The subscription price is proposed to correspond to approximately 125 per cent of the average market price of the Sandvik Series B share during the period April 15 to April 28, 1999. The subscription period is proposed to be during the period May 10 to May 26, 1999. All employees in certain countries other than Sweden, to whom the offer is directed, shall be offered to acquire between 100 and 1,000 warrants.

In the case of full conversion of the convertible debentures and full exercise of the warrants, an estimated 8.7 million shares will be added to Sandvik's share capital, corresponding to a dilution of approximately 3.2 per cent of the capital and of approximately 0.4 per cent of the votes. The share capital in Sandvik AB will thereby increase with approximately SEK 52 M.

The proposal of the Board of Directors will be made available as of April 22, 1999, at Sandvik AB's head quarters.

Sandviken, April 7, 1999

Sandvik AB; (publ)

1)The offer is not directed to the employees of the Seco Tools Group. The offer is not directed to employees in countries where legal or administrative circumstances impede or prevent its implementation.