PROSPECTUS. EUR 400,000,000 Multi-currency Treasury Notes Programme. for. SCANIA CV AB (publ) under the unconditional and irrevocable guarantee of

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1 PROSPECTUS EUR 400,000,000 Multi-currency Treasury Notes Programme for SCANIA CV AB (publ) under the unconditional and irrevocable guarantee of SCANIA AB (publ) Dealers ING Barings/BBL Fortis Bank nv-sa Domiciliary Agent Fortis Bank nv-sa Original issue date : June 5, 1997 Amended as of September1, 1999

2 AFFIDAVIT Each of Scania CV AB (hereafter the Issuer ) and Scania AB (hereafter the Guarantor ), having made all reasonable enquiries, confirms that, to the best of its knowledge and belief (i) this prospectus (the Prospectus ) contain all information with respect to itself and the billets de trésorerie/thesauriebewijzen (hereafter the Treasury Notes ) to be issued under the multi-currency Treasury Notes programme (hereafter the Programme ), which is material in the context of the Programme(ii) the information contained in this Prospectus is true and accurate in all material respects and is not misleading, (iii) the opinions and intentions expressed in this Prospectus are honestly held and (iv) there are no other facts the omission of which would, in the context of the Programme and the issuance of Treasury Notes thereunder, make any of such information or the expression of any such opinions or intentions misleading. Each of the Issuer and the Guarantor accepts responsibility for the information contained in this Prospectus and shall compensate any investor for material damage arising directly from the omission or falseness of any information. TABLE OF CONTENTS Affidavit p. 2 Important notice p. 3 Terms and conditions of the Treasury Notes p. 4 Description of the Scania AB Group p. 12 Description of the Issuer p. 13 Appendices Appendix I Guarantee p. 14 Appendix II Holders of X-account p. 15 2

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4 IMPORTANT NOTICE The information contained in this Prospectus have been obtained from the Issuer and the Guarantor, that have approved the Prospectus and authorised its distribution. No person has been authorised by the Issuer, the Guarantor or the Dealers to give any information or to make any representation not contained in the Prospectus and in its subsequent supplements and, if given or made, such information or representation must not be relied upon as having been authorised. The Prospectus is to be read in conjunction with all subsequent supplements and with all Financial Appendices which are deemed to be incorporated herein by reference and shall be read and construed on the basis that such documents are incorporated and form part of the Prospectus. Financial appendix means, at all time during the life of the Programme, the most recent annual reports of the Issuer and, if they are more recent, its latest consolidated interim report. The Dealers have not separately verified the information contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is made and no responsibility is accepted by the Dealers as to the accuracy or completeness of the information contained in this Prospectus or any other information provided by the Issuer or the Guarantor. The Dealers do not accept any liability in relation to the information contained in this Prospectus or any other information provided by the Issuer or the Guarantor in connection with the Programme. Neither this Prospectus nor any other information supplied in connection with the Programme (i) is intended to provide the basis of any credit or other evaluation or (ii) should be considered as recommendation by the Issuer, the Guarantor, or any of the Dealers that any recipient of this Prospectus or any other information supplied in connection with the Programme should purchase any Treasury Notes. Each investor contemplating purchasing any Treasury Note should make its own independent investigation of the financial condition and affairs, and its own appraisal of the creditworthiness, of the Issuer and/or the Guarantor. Neither this Prospectus nor any other information supplied in connection with the Programme constitutes an offer or invitation by or on behalf of the Issuer or the Guarantor or any of the Dealers to any person to subscribe for or to purchase any Treasury Notes. The delivery of this Prospectus does not at any time imply that the information contained herein concerning the Issuer and/or the Guarantor is correct at any time subsequent to the date hereof or that any other information supplied in connection with the Programme is correct at any time subsequent to the date indicated in the document containing the same. The Dealers expressly do not undertake to review the financial condition or affairs of the Issuer or the Guarantor during the life of the Programme. Investors should review, inter alia, the most recent financial statements, if any, of the Issuer and/or the Guarantor when deciding whether or not to purchase any Treasury Notes. According to its latest annual accounts, the net worth of the issuer was higher than EUR 25 million which complies with the financial requirements of article 13, 1 of the royal decree of October 14, 1991 as amended from time to time (hereafter the Royal Decree ) implementing the law of July 22, 1991 as amended from time to time (hereafter the Law ), concerning "billets de trésorerie et certificats de dépôt/thesauriebewijzen en depositobewijzen". Should the Issuer no longer be able to comply with said financial requirements, it shall not be permitted to issue any new Treasury Notes unless the net worth of Scania AB, that provides its unconditional and irrevocable guarantee to the Treasury Notes issued by Scania CV AB is higher than BEF 1 billion which complies with the financial requirements of article 13, 3 or until the date whereon it shall be able to comply again with said financial requirements. The Prospectus, its subsequent supplements, the audited annual financial statements of the Issuer, the Guarantor and the interim reports of the Scania Group shall be available at the headquarters of the Issuer and of the Dealers. They shall be transmitted, upon request, to any holder of a Treasury Note. Each investor shall also receive a copy of the Prospectus as well as an "Investor Confirmation Form" listing the terms and conditions of the purchased Treasury Note. Each Dealer represents and agrees that it has not taken, and will not take any steps which would constitute or result in a public offering or distribution of the Treasury Notes in any country or any jurisdiction where action for 4

5 that purpose is required. More specifically, but without limitation, potential purchasers are informed that, in accordance with the Law as amended from time to time, this amended Prospectus has not been notified or submitted for approval to the Banking and Finance Commission ("Commission bancaire et financière /Commissie voor het Bank- en Financiewezen") in Belgium, 5

6 TERMS AND CONDITIONS OF THE PROGRAMME Issuer Guarantor Form of the Treasury Notes Scania CV AB, a company incorporated under the laws of Sweden having its registered office at S Södertälje, Sweden All payments under the Treasury Notes issued by the Issuer under this Programme are unconditionally and irrevocably guaranteed by Scania AB (the Guarantor"), a company incorporated under the laws of Sweden having its registered office at S Södertälje, Sweden pursuant to the signing of a guarantee substantially in the form of appendix I. The Treasury Notes to be issued under this Programme shall be dematerialised billets de trésorerie/ thesauriebewijzen (herein individually a Treasury Note, collectively the Treasury Notes ) governed by the Law and the Royal Decree, both as amended from time to time. The conversion of dematerialised Treasury Notes into promissory, bearer or registered Treasury Notes shall not be permitted. The dematerialised Treasury Notes shall be created only by way of book entry on the securities account of their purchasers with their Custodian (as defined below). Dematerialised Treasury Notes will be of one of the following types: Discount Treasury Note: a non-interest-bearing Treasury Note with a tenor of maximum one year, issued on a discount basis and redeemed at maturity for full Nominal Value; Interest-bearing Treasury Note: a Treasury Note with a tenor longer than one year generating periodical interest payments; Zero Coupon Treasury Note: a non-interest-bearing Treasury Note with a tenor in excess of one year, issued on a discount basis and redeemed at maturity for full Nominal Value. Where Nominal Value means the par value of a Treasury Note, exclusive of premium or interest, payable by the Issuer at the Maturity Date (as defined in item Business Day convention ) of such Treasury Note; it is also the value used for the calculation of interest of an Interest-bearing Treasury Note. Settlement The treasury notes shall be created and delivered by the Clearer by way of book entry on the securities account of the purchasers of the Treasury Notes with their Custodian, in accordance with the rules of the Clearing System. Where: Clearer means the entity entitled by law to operate a clearing system in which the Treasury Notes are cleared and which for the time being is the National Bank of Belgium ( S.A. Banque Nationale de Belgique/Nationale Bank van België N.V. ). Clearing System means the clearing system established by: articles 3 to 12 of the law of January 2, 1991 on the market of public debt securities and the monetary policy instruments, as amended; the law of August 6, 1993 on the Transactions on Certain Securities, as amended, and its royal decrees of implementation of May 26 and June 14, 1994, as amended (therefore hereinafter also referred to as the Tax Clearing System ). the law of July 15, 1998 modifying several legal rules concerning financial instruments and the clearing systems and its royal decrees of implementation. Custodian means: 6

7 . Maximum amount of the Programme and currencies for the Treasury Notes issued in Belgian franc and in Euro, a participant in the Clearing System including most of the Belgian banks, stock brokers, Morgan Guaranty Trust Company of New York, Brussels Office, as operator of the Euroclear System ( Euroclear ) and Cedel Bank société anonyme ( Cedel ) which is an indirect participant in the Clearing System; the clearing system is also open to financial institutions from the European Community; for the Treasury Notes issued in an Alternative Currency, the Domiciliary Agent, Euroclear and Cedel. Such Treasury Notes can be received or delivered by Cedel and/or Euroclear only free of payment. Transaction on the secondary market between members of Cedel or Euroclear or through the bridge may be settled on a delivery against payment basis; At the time of any new issue of Treasury Notes, the aggregate Nominal Value of all outstanding Treasury Notes shall not exceed EUR 400,000,000 (or its equivalent in any Alternative Currency). For this purpose, the equivalent in Euro of a Treasury Note denominated in a freely convertible Alternative Currency shall be calculated on the basis of the latest indicative exchange rate published by the European Central Bank on the relevant page on Reuters or, if no such page is available, on the basis of the latest indicative exchange rate published by the National Bank of Belgium on Reuters page NBBX at or about 2:15 p.m. on the Business Day preceding the Issue Date. At the date of issue of a new Treasury Note, the equivalent of the already outstanding Treasury Notes shall be calculated on the basis of the same conversion rate. Where: Euro or EUR means the lawful currency of the participating member states of the European Union that adopt a single currency in accordance with the Treaty establishing the European Communities, as amended by the Treaty on European Union. Alternative Currency means the lawful currency of each of the member countries of the Organization for Economic Co-operation and Development ( OECD ), excluding Euro, provided the Clearer accepts such currency and subject to compliance with all applicable laws, regulations and requirements of the relevant central bank or equivalent body. Denominations Tenor of the Treasury Notes Business Day convention The Nominal Value of a Treasury Note shall be in integral multiples of EUR 25,000, with a minimum of EUR 250,000 or its equivalent in any Alternative Currency. A Treasury Note can have any tenor with a minimum of 7 days without however exceeding the limits imposed by law, if any, or by the Issuer s bylaws and provided however that the tenor of a Discount Treasury Note will never exceed one year. Tenor means the period from and including the Issue Date up to but excluding the Maturity Date. Should any law or regulation enforce a maximum tenor or enforce a different minimum tenor, such limit shall automatically apply to the Treasury Notes issued on or after the implementation date of such amendment. Business Day means a day which is a banking day in Brussels and a day on which issues of Treasury Notes can be settled on the Euro interbank market.or a banking day in the country of the Alternative Currency in which a Treasury Note is denominated 7

8 If a Maturity Date or an Interest Payment Date falls on a day which is not a Business Day, such Maturity Date or Interest Payment Date will be postponed to the next Business Day unless, in the case of floating rate Treasury Note, such day falls into the next calendar month, in which event the Maturity Date or Interest Payment Date will be brought forward to the immediately preceding Business Day. With regard to Discount Treasury Notes, if the next Business Day falls more than 1 year after their respective Issue Date, then the rescheduled Business Day shall be the immediately preceding Business Day. Where: Issue Date means the Business Day on which payment for the purchase of a Treasury Note is to be made and, if applicable, on which a Treasury Note starts to yield interest. Interest Payment Date means, in respect of an Interest-bearing Treasury Note, the Business Day on which interest payments are to be made. With regard to Interest-bearing Treasury Notes issued on a floating rate basis, such Interest Payment Date shall fall one, two, three, six or twelve months or such other period as the Issuer and the investors may agree upon, after the preceding Interest Payment Date or, in the case of the first Interest Payment Date, after the Issue Date. The last Interest Payment Date shall coincide with the Maturity Date. If an Interest Payment Date is modified pursuant to the Business Day Convention, interest shall accrue to, but excluding such Interest Payment Date as rescheduled and such rescheduled Interest Payment Date will be the first day of the immediately subsequent interest period. In the event that an Interest Payment Date is brought forward to the immediately preceding Business Day, each subsequent Interest Payment Date shall be the last relevant Business Day of the month in which such date would have fallen had it not been subject to adjustment. With regard to Interest-bearing Treasury Notes issued on a fixed rate basis, such Interest Payment Date shall fall on the yearly anniversary date of the Issue Date of the Treasury Notes. This shall not prevent the Issuer and the relevant investor from agreeing upon a first, or last, short or long interest period. The last Interest Payment Date shall coincide with the Maturity Date. If the Interest Payment Date is not a Business Day and is therefore modified pursuant to the provisions of the second paragraph above, such change of Interest Payment Date will not cause any adjustment of the interest amount or any other payment being due. Thereafter, the following Interest Payment Date shall revert to the original calendar date. Maturity Date means the Business Day on which a Treasury Note becomes due and payable by the Issuer. Trade Date means the Business Day, which is two Business Days or more prior to the Issue Date of a Discount Treasury Note and three Business Days or more prior to the Issue Date of an Interest-bearing Treasury Note and a Zero Coupon Treasury Note, on which the issue of a Treasury Note is agreed upon and its particular conditions are fixed. Pari passu The Treasury Notes shall represent direct, unconditional, unsubordinated and unsecured obligations of the Issuer and the guarantee shall represent a direct, unconditional, unsubordinated and unsecured obligation of the Guarantor. At all times the Treasury Notes and the guarantee shall rank pari passu with all other present and future unsubordinated and unsecured obligations, respectively, of the Issuer and of the Guarantor for funds borrowed or 8

9 guaranteed by the Issuer and/or by the Guarantor, with the exception of any influence from mandatory provisions by law. Negative pledge Investors As long as any of the Treasury Notes having an initial minimum maturity of one year remain outstanding, neither the Issuer nor the Guarantor shall create or have outstanding any mortgage, pledge, lien or other security interest (other than arising by operation of law) upon the whole or any part of their assets, present or future, to secure any present or future indebtedness represented by any similar financial instruments which are quoted, listed or ordinarily dealt in any stock exchange, over-the-counter market or other recognised securities market. In Belgium, provided the Programme is admitted in the Tax Clearing System and provided the Treasury Notes are booked on the securities account of their purchasers, Treasury Notes may be offered or sold to any investor. In the framework of the Programme however, Zero Coupon Treasury Notes may only be offered or sold to purchasers that are holders of a withholding tax exempted account (hereafter X-account ). In addition, the Treasury Notes may be purchased, offered or sold in jurisdictions other than Belgium only in compliance with applicable laws and regulations of these jurisdictions and/or of the home countries of the relevant currencies in which they are purchased, offered or sold. No action has been or will be taken by the Issuer or the Dealers that would permit a public offering of the Treasury Notes in any country or any jurisdiction where action for that purpose is required. Potential investors are required to inform themselves of, and to comply with, all applicable laws and regulations of such jurisdictions and will accept responsibility accordingly. Placed amount calculation 1. Discount Treasury Notes The placed amount of Discount Treasury Notes shall be calculated according to the following formula: NV P = (Y x D) 1+ N where: P = placed amount of the Treasury Notes NV = Nominal Value of the Treasury Notes Y = yield of the Treasury Notes expressed as annual percentage rate divided by 100 D = actual number of days between Issue Date (included) and Maturity Date (excluded) or such other basis that may be the market convention at the time of issue of a Treasury Note N = 360 or such other basis that may be the market convention at the time of issue of a Treasury Note 2. Zero Coupon Treasury Notes The placed amount of Zero Coupon Treasury Notes shall be calculated according to the following formula: P = NV (1 + Y) D N where: 9

10 P = NV= Y = D = N = placed amount of the Treasury Notes Nominal Value of the Treasury Notes yield of the Treasury Notes expressed as annual percentage rate divided by 100 actual number of days between Issue Date (included) and Maturity Date (excluded) or such other basis that may be the market convention at the time of issue of a Treasury Note actual number of days in a year or such other basis that may be the market convention at the time of issue of a Treasury Note 3. Interest-bearing Treasury Notes The Treasury Notes may be issued at par, at a discount to par or at a premium over par as agreed between the Issuer and the investor(s). The Treasury Notes may be issued on a fixed or floating interest rate basis or any other basis which may result from market innovation provided the Clearer accepts such basis. Fixed interest shall be calculated as determined upon issue either on an actual/actual basis or such other basis that may be market practice at the time of issue of a Treasury Note or such other basis as may be agreed upon between the parties. Floating interest shall be calculated on the basis of the actual number of days elapsed divided by 360 or such other basis that may be market practice at the time of issue of a Treasury Note or such other basis as may be agreed upon between the parties. Interest payments and reimbursement Late Payment Any interest or principal amount due to the holder of a Treasury Note on an Interest Payment Date or on a Maturity Date, as appropriate, shall be credited, in accordance with the rules of the Clearing System and with the terms of the clearing agreement, on its cash accounts with its Custodian, after deduction of withholding tax if applicable, on the basis of the amounts of the securities booked on its securities accounts with such Custodian. In case of repayment of a Treasury Note, the securities account of the holder of the Treasury Note shall be debited accordingly. If any amount remains unpaid under any Treasury Note when due, the Issuer will, to the extent permitted by law, pay interest on such amount, calculated on a daily accrual basis, at the rate of 1% above the Applicable Default Rate. The Applicable Default Rate is due without the necessity of demand or other notices of any kind. Applicable Default Rate means (a) with respect to a Note denominated in EUR the Euro Overnight Index Average ( EONIA ) computed by the ESCB as the weighted average of all overnight unsecured lending transactions undertaken in the euro area.and (b) with respect to a Note denominated in an Alternative Currency, the prevailing overnight Interbank Offered Rate in such currency at approximately a.m. (time of the financial centre where such Interbank Offered Rate is fixed). Secondary market Whenever an investor wishes to sell one or several Treasury Notes before their respective Maturity Date, the Dealers shall try, on a best effort basis and without any commitment whatsoever on its part, to find one or several buyers for such Treasury Notes. 10

11 Each investor is allowed to sell one or several Treasury Notes it owns provided that, pursuant to article 6 of the Royal Decree, such sale may not result in an investor holding a Treasury Note having a Nominal Value of less than EUR With regard to the Treasury Notes denominated in an Alternative Currency other than BEF, article 2 2 of the royal decree of June 14, 1994, stipulates that no transfer of Treasury Notes may occur between Custodians on a value date falling two Business Days or less before a Maturity Date or an Interest Payment Date. Taxation All payments of principal and interest by the Issuer and/or the Guarantor in respect of the Notes will be made without deduction or withholding for, or on account of, any present or future taxes or duties of whatever nature imposed or levied by, or on behalf of - the Kingdom of Belgium, or any political subdivision thereof or any authority or agency therein or thereof having power to tax, provided that the holder of a Note belongs to one of the categories of investors listed in article 4 of the Royal Decree of May 26, 1994, ("exempted account holder or X-account holder") as amended from time to time, and provided that it has delivered to its Custodian a certificate stating that it belongs to one of these categories; - the Kingdom of Sweden, or any authority or agency therein or thereof having power to tax, unless such deduction or withholding is required by a subsequent law. In such event, the Issuer or, as the case may be, the Guarantor, will pay such additional amount as shall be necessary in order that the net amount received by the holders of the Notes after such withholding or deduction shall equal the amounts which would have been received in respect of the Notes in the absence of such withholding or deduction. No additional amounts shall be payable with respect to any Note - to, or to a third party on behalf of, the holder of a Note that is not, or ceases to be an X-account holder, its account with its Custodian will be designated as a non-exempted account ("N-account); or - to, or to a third party on behalf of, the holder of a Note who is liable to such taxes or duties, in respect of such Note by reason of his having some connection with the Kingdom of Sweden other than (a) the mere holding of such Note or (b) the receipt of any amounts in respect of such Note; or - to, or to a third party on behalf of, the holder of a Note who would not be liable or subject to the withholding or deduction (but has not so avoided) by making a declaration of non-residence or other similar claim for exemption to the relevant tax authority; or No stamp duty ("Taxe sur les opérations de bourse/taks op Beursverrichtingen") is due in respect of the Notes in Belgium at present. Without prejudice to the foregoing, the investor shall bear any tax, duty, charge or fiscal liability which may arise in connection with its acquisition, holding or disposal of the Notes. 11

12 Early redemption for tax reason If, as a result of any amendment to or any change in the laws or regulations of (i) the Kingdom of Belgium or any political subdivision thereof or any authority or agency thereof or therein or in the interpretation or administration of any such laws or regulation which becomes effective on or after the Issue Date of a Note, the Issuer and/or the Guarantor are requested to pay any additional amount as provided above to the holder of a Note being an X- account holder; or (ii) the Kingdom of Sweden or any political subdivision thereof or any authority or agency thereof or therein or in the interpretation or administration of any such laws or regulations which becomes effective on or after the Issue Date of a Note, the Issuer and/or the Guarantor would, on the occasion of the next payment date, be required to pay additional amounts as provided above The Issuer may, at its option, at any time on giving not more than 30 days nor less than 15 day s notice to the investors (which notice will be irrevocable), redeem all Notes on which such withholding is required at their redemption amount. Prior to this notice, the Issuer shall deliver to the Domiciliary Agent a certificate duly signed by the Issuer stating that it is entitled to effect such redemption and setting forth a statement of the facts showing that the conditions precedent to the right of the Issuer so to redeem have occurred. The redemption amount will be calculated in the way as under the article Events of Default below. 12

13 Events of Default If (i) the Issuer fails to pay in part or in full any sum under any Treasury Note as and when it shall become due and payable either at Maturity Date or Interest Payment Date, upon redemption or otherwise, and such failure is continuing for 5 Business Days after the date on which such sum was due; or, (ii) the Issuer or, as the case may be, the Guarantor fails to duly observe or perform any other of the material undertakings contained herein and such failure is continuing for 15 Business Days after the date on which written notice of such failure requiring the Issuer to remedy the same shall have been addressed to the Domiciliary Agent by holders of any Treasury Notes at that time outstanding and such written notice from a holder of any Treasury Notes has been made known to the Issuer or, as the case may be, to the Guarantor; or, (iii) the Issuer or, as the case may be, the Guarantor, in a situation of their insolvency, commences negotiations with any one or more of their creditors with a view to a general readjustment or rescheduling of their indebtedness or makes a general assignment for the benefit of or a composition with their creditors (except in the ordinary course of business); or, (iv) (v) (vi) the Issuer or, as the case may be, the Guarantor defaults in the due payment of any other indebtedness having a minimum amount of BEF 100 million (or its equivalent in any other Foreign Currency or Currencies) of, or assumed or guaranteed by, the Issuer or, as the case may be, the Guarantor unless the relevant payment is contested in good faith by the Issuer and by appropriate proceedings, and provided any such default has not been cured within the period contractually agreed upon or subsequently agreed upon for such payment, or in the event that any such indebtedness shall have become repayable before the due date thereof as a result of acceleration of maturity by reason of the occurrence of any event of default thereunder; or, the Issuer or, as the case may be, the Guarantor takes any corporate action or other steps are taken or legal proceedings are started (in a voluntary or involuntary case) for their insolvency winding-up, dissolution or reorganisation or for the appointing of a receiver, liquidator, sequestrator (or other similar official) of the Issuer or of the Guarantor or of any substantial part of their property; or the guarantee ceases to be in full force and effect for the Treasury Notes issued by the Issuer then, in each and every such case, any holder of a Treasury Note may, by written notice by registered letter to the Issuer and to the Domiciliary Agent, declare that such Treasury Note shall be forthwith due and payable, whereupon as from the date of notice, such Treasury Note shall become immediately due and payable.. For the purpose of this article, the redemption amount shall be with respect to each Interest-bearing Treasury Note, the Nominal Value of the Treasury Note together with interest accrued thereon, if any; with respect to each Discount Treasury Note or Zero Coupon Treasury Note, the amount calculated as in the item Placed amount calculation above, as appropriate, where P is the redemption amount, Y is the 13

14 Governing Law and jurisdiction Notices original yield applied to the Treasury Note and D is the number of days between the early redemption date, included, and the Maturity Date of the Treasury Note (excluded). The Treasury Notes shall be governed by the laws of the Kingdom of Belgium. Any disputes in connection with the Treasury Notes shall be brought before the competent courts of Brussels. Any notice to holders of Treasury Notes shall be validly given if published once in two leading financial Belgian newspapers (which are expected to be L Echo and De Financieel Economische Tijd ) or, if this is not practicable, in one or two other leading French and/or Dutch language newspapers with general circulation in Belgium. Such notice shall be deemed to have been given on the date of publication or, if published on more than one date or on different dates, on the first date on which such publication shall have been made. Notices to the Issuer and to the Guarantor shall be made by fax or by registered letter to the following address: Scania CV AB S Södertälje Sweden Fax Scania AB S Södertälje Sweden Fax Notices to the Dealers shall be made by fax or by registered letter to the following addresses: Fortis Bank nv-sa Montagne du Parc, 3 B-1000 Brussels, Belgium Financial Markets Fax: Banque Bruxelles Lambert S.A./ Bank Brussel Lambert N.V. Avenue Marnix-laan 24 B-1000 Brussels, Belgium Capital Market Support Fax: Notices to the Domiciliary Agent shall be made by fax or by registered letter to the following address: Fortis Bank nv-sa Montagne du Parc, 3 B-1000 Brussels, Belgium Financial Markets Fax: Dealers & Contact persons Ms Mary José Rodriguez Mr Luc Claeyé Mr Frank Buysse Mrs Martine Van Sinay Fortis Bank nv-sa Tel: Tel: Tel: Tel: Banque Bruxelles Lambert/ Bank Brussel Lambert 14

15 Commercial Paper Desk Mr. Karl Pittevils Tel:

16 The figures contained in the description below are assumed to be correct at the date of issue of the Prospectus, as shown on the cover page. After that date, the investors are invited to refer to the Financial Appendix and to the annual report from the parent company, as updated from time to time. 1. Historic overview THE SCANIA AB GROUP Scania s origins date back to 1891, when Vagnfabriks-Aktiebolaget i Södertelge ( Vabis ) was established. In 1911, Vabis merged with Maskinfabriksaktiebolaget Scania, founded in Malmö in 1901, to form AB Scania-Vabis ( Scania-Vabis ). During the 1920s, the company focused on heavy trucks, buses and engines, which continue to be Scania s areas of business today. During the 1950s, exports increased substantially and, in 1957, a subsidiary was set up in Brazil. The general expansion continued throughout the 1960s : the first foreign production plant was opened in Brazil in 1962 and in 1965, another was established in Zwolle, Holland. In 1969, Saab-Scania AB was formed through the merger of Scania-Vabis (which was then a listed company) and Saab AB, a Swedish car and aircraft manufacturer. In 1991, Saab-Scania became a whollyowned subsidiary of Investor AB, a Swedish-based industrial holding company. In 1994, Scania was organised as a separate company and in April 1996, Investor sold some 55 % of the shares in Scania AB through an international public offering. On April 1, 1996, Scania was listed on the Stockholm and New York Stock Exchanges. Scania began developing its modular product system in the 1960s and introduced its first extensive modular generation of trucks, the 2-series in The new concept proved to be extremely successful and had a positive impact on both the sales and profitability of the group. The Company launched its 3-series in 1988 and in 1995 introduced the first models in the 4-series, its third generation of modular trucks. Scania currently employs approximately 23,600 people and is represented in some 100 countries worldwide, with principal production facilities in Europe and South America. It began its international expansion in the 1950s and, following a long period of capital investment, the Company was transformed from a domestic manufacturer to the international market player that it is today. Currently, approximately 96 % of Scania s heavy vehicle units sales are made outside Sweden. 2. Business description Scania focuses on the engineering, manufacture and marketing of heavy trucks and buses. The trucks have a gross vehicle weight (GVW) of 16 tonnes or more and are designed for long-distance haulage, construction haulage and local distribution work. The buses and bus chassis are designed for more than 30 passengers for use as city buses, intercity buses and tourist coaches. In 1998, the truck and bus operations accounted for 87 % of total sales. In 1998, Scania was the world s fifth largest heavy truck brand, and the second largest in Europe. The most important markets for its heavy vehicles are in Europe (particularly the UK, France and Germany for trucks and Spain, Sweden and the UK for buses) and South America (Brazil and Argentina). In 1998, Scania s market share was 15.2 % of the heavy truck market in Western Europe and 7.6 % of the bus market, both measured by registrations. In South America, the Company was one of the market leaders in truck manufacture in both Brazil and Argentina, with a market share of 33.4 % and 28.6 % respectively. 16

17 In addition to heavy vehicles, Scania manufactures industrial and marine engines which, in 1998, accounted for 1 % of group sales. Again, principal markets are in Europe and South America. A significant factor in Scania s efficient operations is its unique modular product system. The Company has developed this concept over many years and its aim is to offer maximum flexibility to its customers by designing, manufacturing and marketing tailor-made vehicles, while limiting and standardising the number of components in use. Customers can specify in detail the vehicle required for a particular transport need by selecting from a number of possible alternative combinations. Scania believes that this system gives it a competitive advantage over other manufacturers by increasing its cost efficiency in product development, production, sourcing and after-sales service. Scania employs an integrated product concept, combining the sale of the vehicle with the provision of Scania spare parts and maintenance and repair services. This concept enables Scania and its dealers to benefit from the after-sales revenues generated by each vehicle and to increase the level of customer retention. In addition to the above-mentioned operations, Scania has an equal shareholding with Volkswagen AG in Svenska Volkswagen AB, the exclusive importer in Sweden for a range of passenger cars and light trucks (an associated company). Scania also sells Svenska Volkswagen s products through its wholly-owned dealerships in Sweden and these sales accounted for 12 % of group sales in Belgian activities Scania operation in Belgium consist of a wholly own subsidiary, Scania Belgium, acting as the General Agent for Scania on the Belgian market. Under the General Agent there are 14 Dealers operating in Belgium (including Luxembourg) whereof 6 of the dealers are owned by Scania Belgium. In 1998, 1,356 new Scania trucks were registered in Belgium which resulted in a market share of 18 % for Scania. Under the General Agent there is also a wholly owned finance company (Scania Finance Belgium) which can provide the trucks customers with financing solutions if needed. SCANIA CV AB The principal subsidiary of Scania AB is Scania CV AB. It is a wholly-owned subsidiary of Scania AB and comprises all Scania operations outside Latin America. In 1998, Scania CV AB accounted for close to 90 % of group sales. The assets of the Scania CV Group at year-end 1998 amounted to SEK 37,366 million (in 1997 : SEK 31,149) compared to total group assets of SEK 44,802 million (in 1997 : SEK 38,396). 17

18 GUARANTEE APPENDIX I Scania AB, a company incorporated under the laws of Sweden and having its registered office at S Södertälje (the Guarantor ) hereby irrevocably and unconditionally guarantees to each holder (collectively the Holders, individually a Holder ) of the Treasury Notes (collectively the Notes, individually a Note ) of Scania CV AB (the Issuer ) issued in accordance with the terms and conditions of the Treasury Notes set forth in the Prospectus established in accordance with the terms of the agreement relating to the multi-currency treasury notes programme (the Agreement ) dated June 5, 1997, as amended from time to time, the due and punctual payment of any amount in respect of each Note either on its Maturity Date or on its Interest Payment Date, upon default by the Issuer of paying such amount on its Maturity Date or on its Interest Payment. This guarantee is a primary obligation of the Guarantor and is payable on first demand, without regard to the merits of such demand. The Guarantor hereby expressly waives protest of any kind whatsoever, as well as any requirement that the Holder would take any action against the Issuer. The Guarantor s liability under this Guarantee shall not be discharged in whole or in part or otherwise affected in any way by reason of time given to the Issuer or by any other indulgence or concession given to the Issuer, by the varying of the obligations of the Issuer. If any amount expressed to be payable on any Note is not recoverable from the Issuer for any reason, such amount shall be recoverable by the Holder from the Guarantor as principal debtor. This Guarantee shall continue to have effect until all sums whatsoever payable by the Issuer to the Holders are paid in full. The obligations of the Guarantor under this Guarantee are direct, unconditional and unsecured obligations of the Guarantor ranking pari passu with all other unsubordinated and unsecured obligations of the Guarantor, except such obligations that have preference by law. This guarantee shall be governed by, and interpreted in accordance with, the laws of Belgium. All actions arising out of or based upon this guarantee are to be brought before the competent court in Brussels. In witness whereof, the Guarantor has authorised and caused this guarantee to be duly executed and delivered as of July, For Scania AB (Publ) 18

19 APPENDIX II HOLDERS OF X-ACCOUNTS At the issue date of this Prospectus, the categories of investors which may hold an X-account as listed in article 4 of the Royal Decree of 26 May, 1994 on the collection and refunding of withholding tax in accordance with chapter I of the Law of 6 August, 1993 relating to transaction with certain securities, are 1 resident companies specified in article 2, 2, 2 of the Income Tax Code of 1992; 2 institutions, associations or companies specified in article 2, 3 of the law of July 9, 1975 relative to the control of the insurance companies (without prejudice to the implementation of article 262,1 and 5 of the Income Tax Code of 1992), other than those referred to under 1 and 3 ; 3 state-linked social security organisations and assimilated organisations specified in Article 105, 2 of the Royal Decree implementing the Income Tax Code of 1992; 4 non-resident investors specified in Article 105, 5 of the same Decree; 5 mutual funds specified in Article 115 of the same Decree; 6 tax-payers specified in Article 227, 2 of the Income Tax Code of 1992, which are subject to the Non- Resident Tax ("Impôts des Non Résidents / Belasting der niet Inwoners") according to Article 233 of the same Code and which have used the earning producing assets in the exercise of their professional activity in Belgium; 7 the Belgian State, for its investments exempted from withholding tax in accordance with article 265 of the Income Tax Code of 1992; 8 foreign investment funds which are an undivided patrimonium managed by a management corporation on behalf of the participants, if their rights of participation are not publicly issued nor sold in Belgium; 9 the resident companies not referred to in 1 having an activity that consists solely or mainly of granting credits and loans. 10 only for the revenues, referred to in article 2, 1, 1 and 2, the Communities, the Districts and the Community Commissions, the Provinces, the Communes as well as the public institutions and institutions of public welfare depending on or subsidised by the Belgian State, the Communities, the Districts and the Community Commissions and that for the application of the European Communities Rule N 3605/93 of November 22, 1993 on the application of the Protocol on the procedure concerning excessive deficits attached to the Treaty of the European Communities are part of the sector of public authorities in the sense of the European System of Integrated Economic Accounts (ESIEA). 19