Norske Skog - press conference

2017-09-18

The attached presentation was used by the chairman of Norske Skogindustrier ASA Christen Sveaas during the press conference today.

Norske Skog Communication and corporate affairs

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OSLO BØRS - MATCHING HALT ENDS

2017-09-18

See announcement issued by NSG today at 15:12 CET. Matching halt to end at 15:30 CET.

There will be a Re-Opening Auction Call until 15:35 CET.

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Recapitalization of the Norske Skog group

2017-09-18

Norske Skog launches a recapitalization transaction aiming to provide the group with a sustainable capital structure for the future. This proposal provides a final opportunity to reach a consensual solution among all bondholders and shareholders.

The proposal seeks to strike an appropriate balance between the different interests of the stakeholder groups, as well as to provide for a recapitalized Norske Skog that will be much more financially resilient and better serve the interests of all stakeholders going forward.

"The proposal presented will regrettably result in losses for the group's creditors and material dilution for its shareholders. However, the proposal represents what we believe is achievable under the current circumstances, and will provide a solid platform for our seven business units in the future" says Mr. Christen Sveaas, Chairman of the Norske Skog group.

"Given the actions taken last week by the secured bondholders, this proposal provides a final opportunity to reach a consensual solution among all bondholders and shareholders. I accordingly urge all stakeholders of the Norske Skog group to support the recapitalization proposal, as all other alternatives will entail less value and complicated insolvency processes", Mr. Sveaas adds.

The key terms of the proposed recapitalization transaction are: - The conversion into equity of all outstanding, unsecured bond debt of approximately EUR 500 million including accrued interest as of 31 August 2017.

- The conversion into equity of EUR 171 million of the secured debt, including accrued interest totaling EUR 421 million as of 31 August 2017.

- After such conversions, the equity ownership of Norske Skogindustrier ASA would be split as follows: a. Secured note holders: 94% b. Unsecured noteholders: 4% c. Existing shareholders: 2%

- New senior secured bonds are issued to the owners of the EUR 290 million bond loan and the EUR 100 million NSF- loan, with the same collateral security as today's secured debt, of EUR 250 million at 8.5% interest and with a maturity of 5 years.

- The board proposes an equity offering in Norske Skogindustrier ASA of up to approximately NOK 400 million with preferential rights for existing shareholders and unsecured creditors by approximately NOK 200 million to each group. If fully subscribed, this will entail an increase in their ownership interest from 6% to 23%. The Board proposes that the subscription price be set at a valuation of 6x the revised 2017 GOE guidance of NOK 700 million.

- The liquidity facility of EUR 16 million from the secured bondholders has now been drawn and will secure operations at the Group's seven plants. The board proposes that this loan is repaid in connection with the above- mentioned equity offering.

If the proposal is successful, the transaction will reduce the group's gross debt from approximately NOK 9 billion by NOK 6 billion to approximately NOK 3 billion. Annual cash interest costs will be reduced from approximately NOK 600 million to approximately NOK 200 million.

The creditors will have a 10 business days period to consider the proposal to Friday 29 September 2017 (17:00 CET). The proposal is intended to be implemented by way of creditor schemes of arrangement undertaken in the English courts. Such schemes of arrangement would requires the approval of a majority in number and 75% in value.

The transaction will also need the support of existing shareholders of Norske Skogindustrier ASA, with a 2/3 majority in an extraordinary general meeting to be called for shortly after the expiry of the consent solicitation offer period.

If the recapitalization proposal is cancelled, it is likely that the boards of directors of Norske Skogindustrier ASA, Norske Treindustrier AS, and Norske Skog Holding AS will file for voluntary or compulsory debt negotiation proceedings or bankruptcy in the Norwegian courts. At the same time, it is likely that the secured note holders will conclude that the only realistic path open to them will be for them to enforce upon their security over the shares in Norske Skog AS, which will result in the business and operations of the group being delivered into new ownership with little or no recovery accruing to holders of unsecured notes or to existing shareholders. The boards therefore recommend that all bondholders and shareholders approve the proposals.

"It is very important for us to reiterate to all of our customers, suppliers, employees and other stakeholders of the Norske Skog group that the production at our seven paper mills and the other operating business of the group's subsidiaries will continue as normal during this process. Our customers, suppliers and other business partners will continue to receive high quality products and the best service from Norske Skog without interruption through this final lap of the recapitalization process" said Mr. Lars P. S. Sperre, President and CEO of the Norske Skog group.

This information is not for distribution in the United States and is subject of the disclosure requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act.

Norske Skog Communications and Public Affairs

For further information: Christen Sveaas Chairman Norske Skogindustrier ASA Email: Christen.Sveaas@kistefos.com

Lars P. S. Sperre CEO & President Norske Skogindustrier ASA Email: Lars.Sperre@norskeskog.com

This press release may include projections and other "forward- looking" statements within the meaning of applicable securities laws. Any such projections or statements reflect the current views of Norske Skogindustrier ASA or its subsidiaries ("Norske Skog") about further events and financial performance. Although Norske Skog believes that these views and assumptions are reasonable, the statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. No assurances can be given that such events or performance will occur as projected and actual results may differ materially from these projections.

This press release shall not constitute an offer to sell or a solicitation of an offer to purchase any securities in the Unites States, and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful. The securities have not been and will not be registered under the Securities Act of 1933 (the "Securities Act"). The securities may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from registration requirements. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer and that will contain detailed information about the company and management, as well as financial statements. This press release is being issued pursuant to and in accordance with Rule 135e under the Securities Act.

In member states of the European Economic Area, this press release (and any offer of the securities referred to herein if made subsequently) is only addressed to and directed at persons who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive.

This press release is directed only at (i) persons who are outside the United Kingdom or (ii) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2) of the Order or (iv) persons to whom an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (the "FSMA")) in connection with the issue or sale of any notes may otherwise be lawfully communicated or caused to be communicated (all such persons together being referred to as "relevant persons"). Any investment activity to which this communication relates will only be available to and will only be engaged with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

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OSLO BØRS - MATCHING HALT

2017-09-18

A matching halt has been imposed in anticipation of an announcement from the Company.

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Norske Skog: press conference today postponed until 15.00 CET

2017-09-18

Christen Sveaas, chairman of the board in Norske Skogindustrier ASA, will present the board's new recapitalization proposal in a press conference today Monday 18 September 2017 at 15:00 CET at Karenslyst allé 2 in Oslo.

Norske Skog Communication and corporate affairs

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Business Units

Mail

Norske Skogindustrier ASA
PB 294 Skøyen
0213 Oslo
Norway
info@norskeskog.com

Phone: +47 22 51 20 20
Main fax: +47 22 51 20 21
See more contact information

Visitors

Norske Skogindustrier ASA
Karenslyst allé 49
0278 Oslo

Norske Skogindustrier ASA, PB 294 Skøyen, 0213 Oslo, Norway

Phone: +47 22 51 20 20 - Main fax: +47 22 51 20 21