$9,000,000 6 3/4% guaranteed dollar debentures due September 1, 1978

Founded in 1841, the Aktiebolaget Gotaverken (Gotaverken) of Göteborg Sweden was one of the largest shipbuilding companies in the world. For many years the company had a distinguished history of building hundreds of tankers and other ocean-going vessels. In the early 1960s, Gotaverken, like many other European shipyards, began suffering significant losses after completing the profitable orders booked following the closure of the Suez Canal in 1956. This difficult situation was compounded by an increasingly competitive Japanese shipbuilding industry. Gotaverken responded to these changes in the industry by building a new shipyard at Arundel in the mid-1960s with an advanced production system. However, it had little success. In 1966, in a government-approved deal, Gotaverken was acquired by Brostrom, a Swedish shipbuilding group that already owned Eriksberg, one of the other four large shipyards located in Sweden. In the late 1960s, Gotaverken began construction of VLCCs (very-large container ships) and large sums of money were in invested in new production facilities. Much money was also invested in labor-saving equipment as the Gotaverken and other Swedish shipyards were increasingly confronted by labor shortages. These strategies, however, did not help Gotaverken, and in 1971 the company had to be saved from bankruptcy by the Swedish government. Shortly afterwards, ownership in Gotaverken was transferred by Brostrom to Salen, another Swedish shipping group. By 1975 Gotaverken and another large Swedish shipyard, Eriksberg, were embroiled in problems caused by a lack of orders, speculative finance construction, and the increasing international price of oil. As a result of their continuing poor performance, a state-owned company, Svenska Varv AB, was created in 1977 and took over Gotaverken, Eriksburg, and another shipyard, Kockums. Svenska Varv AB was renamed Celsius Industrier AB in 1987. Today, Celsius Industrier AB is part of the Celsius AB Group, a company that does business primarily in defense industry operations and commercial aviation services. There is only one shipyard left in Göteborg today and it is limited to repair work.