Disposal

ABB Ltd
04 September 2002


ABB sells Structured Finance business to GE Commercial Finance for 
US$ 2.3 billion

Sale will reduce net debt by US$ 2.3 billion


Zurich, Switzerland, September 4, 2002 - ABB, the global power and automation
technology group, said today it has signed an agreement to sell most of its
Structured Finance business to GE Commercial Finance for total cash proceeds,
including equity and debt, of about US$ 2.3 billion. ABB's net debt will be cut
by the same amount.

'The sale of Structured Finance is an important step in our ongoing program to
strengthen the balance sheet, and allows us to cut net debt by US$ 2.3 billion,'
said Jorgen Centerman, president and CEO of ABB. 'The divestment of this
activity is fully in line with our strategy to focus on power and automation
technologies for industry and utility customers.'

Centerman reaffirmed ABB's targets for 2002 of an EBIT margin of 4-5 percent and
flat revenues.

The divestment of Structured Finance is subject to customary regulatory
approvals.

'With the sale of Structured Finance, we are confident that we will reach our
target of reducing net debt by at least US$ 1.5 billion this year from US$ 4.1
billion at the end of 2001,' said Peter Voser, ABB's chief financial officer.

At the end of the first half of 2002, net debt had increased to US$ 5.2 billion.
Voser said: 'The additional net debt reduction needed to meet our targets this
year will be achieved through stronger net cash from operations in the second
half of 2002 and other asset sales, including real estate.'

ABB said it will use the cash from the sale to repay scheduled debt maturing in
the fourth quarter of this year - including its bank facility, commercial paper
and bonds - of about US$ 1.2 billion. The remainder of the cash will be used to
repay other debt maturing mainly next year.

The Structured Finance portfolio being divested includes global infrastructure
financing, equipment leasing and financing businesses.

As previously announced, ABB will retain some US$ 0.9 billion in leasing assets
related to its core businesses, representing about 15 percent of the total
Structured Finance business area assets. ABB will retain its Financial Advisory
unit (75 employees) which mainly serves ABB's industrial divisions with advice
on arranging financing for customer projects.


Under the agreement GE Commercial Finance will:

  • acquire total assets of about US$ 3.8 billion, including the US$ 3.4
    billion loan and lease portfolio.
  • pay about US$ 400 million for Structured Finance equity, which represents
    a discount of 2 percent on the underlying book value of the loan and leasing
    receivables portfolio.
  • pay ABB US$ 1.9 billion to cover Structured Finance net debt (US$ 2.1
    billion in debt minus US$ 200 million cash already on Structured Finance's
    balance sheet).
  • assume other liabilities of about US$ 1.2 billion.

With equity and debt payments, and after transaction costs, total cash proceeds
for ABB will be about US$ 2.3 billion.

The 2 percent discount on the US$ 3.4 billion loan and lease portfolio, the
transaction costs related to the deal and provisions, correspond to a book loss
of around US$ 125 million. This amount will be booked as discontinued operations
and will not affect EBIT.

Not included in the divestment are: the ABB Export Bank, ABB's 35 percent equity
stake in the Swedish Export Credit Corporation, and the aircraft leasing
business. ABB is in negotiations to divest some or all of these businesses,
whose total book asset value was about US$ 0.9 billion at the end of June 2002.

Structured Finance, part of the Financial Services division, employs 500 people
in 11 countries.

ABB will host a conference call for analysts and investors at 16:30 CET today, 4
September, 2002. If you wish to listen, call: [phone] (Europe and rest
of world), 1 412 858 46 00 (U.S.). There will be a digital playback for 72 hours
commencing 2 hours after the conference. Participants requesting the digital
playback should dial: [phone] (in Europe) or [phone] (in U.S.)
and will be asked to enter the conference ID 010 followed by the # sign.

ABB (www.abb.com) is a global leader in power and automation technologies that
enable utility and industry customers to improve performance while lowering
environmental impacts. The ABB Group of companies operates in more than 100
countries and employs about 150,000 people.

This press release includes forward-looking information and statements that are
subject to risks and uncertainties that could cause actual results to differ.
These statements are based on current expectations, estimates and projections
about global economic conditions, the economic conditions of the regions and
industries that are major markets for ABB Ltd and ABB Ltd's lines of business.
These expectations, estimates and projections are generally identifiable by
statements containing words such as 'expects', 'believes', 'estimates' or
similar expressions. Important factors that could cause actual results to differ
materially from those expectations include, among others, economic and market
conditions in the geographic areas and industries that are major markets for
ABB's businesses, market acceptance of new products and services, changes in
governmental regulations, interest rates, fluctuations in currency exchange
rates and such other factors as may be discussed from time to time in ABB's
filings with the U.S. Securities and Exchange Commission. Although ABB Ltd
believes that its expectations reflected in any such forward-looking statement
are based upon reasonable assumptions, it can give no assurance that those
expectations will be achieved.

APPENDIX:


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