French graphite solutions and electrical components company Carbone Lorraine SA (CRL.FR) said Wednesday that it plans to carry out a capital increase of around EUR60 million.

MAIN FACTS:

-This issue, subject to Autorite des Marches Financiers' approval on the Prospectus, is aimed primarily at existing shareholders who will enjoy preferential subscription rights.

-It is expected to be led by HSBC and Societe Generale.

-The PACEO equity line will be put on standby.

-The Group's two principal shareholders, namely AXA Private Equity and Sofina, are expected to commit to taking up their full allocations, thereby demonstrating their support for the Group's strategy.

-Recent capital expenditures and acquisitions have been predominantly debt-financed. If the Group wants to continue pursuing growth initiatives, it will need to reduce this debt level.

-In the medium term, Carbone Lorraine aims to bolster its positioning in markets related to sustainable development, such as alternative energies, energy efficiency and rail transportation. In 2008, these markets accounted for around one-third of the Group's sales. The objective is for these markets to contribute more than 50% of the Group's sales, with 25% deriving from alternative energies. Asia is expected to remain a region generating strong growth for the Group. The objective is for the region to contribute 30% of the Group's sales.

-The substantial downturn in traditional markets sparked a tangible top-line contraction, with like-for-likesales falling 6% during the first quarter and 20% during the second compared with the year-earlier period. During the third quarter, the sales contraction compared with the previous year is likely to be on a similar scale to that seen in the second quarter.

Company Web site: www.carbonelorraine.com

-By Paris Bureau, Dow Jones Newswires; +331-4017-1740; alice.dore@dowjones.com