Launch of sales process for Norske Skog AS

2017-12-13

Please see the attached launch announcement regarding the sales process for Norske Skog AS and its subsidiaries, led by the financial adviser Evercore Partners International LLP.

The board of the listed parent company, Norske Skogindustrier ASA, will continue the process as previously communicated to conclude on its considerations of the situation and the likely filing for insolvency.

Norske Skog Communications and Public Affairs

For further information: Christen Sveaas Chairman Norske Skogindustrier ASA Email: Christen.Sveaas@kistefos.no

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

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Launch of sale process for Norske Skog AS

2017-12-13

Norske Skog AS has appointed Evercore Partners International LLP (Evercore) to act as its financial adviser in connection with a sale of Norske Skog AS and its subsidiaries (the Norske Skog group's operating businesses) by way of a competitive sale process which will commence imminently. A range of bidders will be invited to participate in the competitive sale process.

Norske Skog group's seven paper mills will continue as normal, and our customers, suppliers and other business partners will continue to receive high quality products and services from Norske Skog without interruption throughout the competitive sale process.

Any parties, including any existing Norske Skog investors, together with any corporates or financial investors, which are interested in participating in the sale process are invited to contact Evercore as soon as possible to indicate their interest.

The relevant contact details at Evercore are as follows:

Mr. Greg-Henri Bize Evercore 15 Stanhope Gate London, W1K 1LN Tel: +44 20 7653 6772 Email: evercore.northstar@evercore.com

Norske Skog Communications and Public Affairs

Evercore Partners International LLP (Evercore), which is authorised and regulated by the Financial Conduct Authority, is acting exclusively for Norske Skog AS and no one else in connection with the above-mentioned sale and, save as agreed in writing with Evercore in advance, will not be responsible to anyone other than Norske Skog AS for providing the protections afforded to clients of Evercore nor for providing advice in relation to the above-mentioned sale or any other matter referred to in this aannouncement.

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Update on recapitalization process

2017-11-23

Funds managed by Oceanwood Capital Management and Aker Capital AS, a wholly owned subsidiary of Aker ASA, have today issued a joint press release stating the intention to form a new company (Bidco), which will bid in an auction process to ensure that there is a strong new owner of Norske Skog's paper mills.

The board of directors of Norske Skogindustrier ASA is pleased that Aker, with its strong industrial knowledge and financial expertise, has taken a role together with Oceanwood in the recapitalization of the Norske Skog group.

The board of directors of Norske Skogindustrier ASA will continue to safeguard the interest of all its stakeholders through the recapitalization process. As part thereof, the Norske Skog group's seven paper mills will continue as normal, and our customers, suppliers and other business partners will continue to receive high quality products and the best service from Norske Skog withouth interruption through the remainder of the recapitalization process.

Following the announcement by Oceanwood and Aker, a consensual recapitalization of the Norske Skog group is unlikely to be achievable. Consequently, Norske Skogindustrier ASA is likely to initiate insolvency proceedings. The board of directors of Norske Skogindustrier ASA will continue to assess the situation and the implactions of the recent developments.

Norske Skog Communications and Public Affairs

For further information: Christen Sveaas Chairman, Norske Skogindustrier ASA Email: Christen.Sveaas@kistefos.no Lars P. S. Sperre President & CEO, Norske Skogindustrier ASA Email: Lars.Sperre@norskeskog.com

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Performance impacted by currency

2017-11-23

Norske Skog's gross operating earnings (EBITDA) in the third quarter 2017 were NOK 143 million, a decrease from NOK 190 million in the second quarter 2017. Gross operating earnings declined despite an increase in sales volume in Europe due to NOK appreciation, and less domestic demand in Australasia resulted in more low-margin export sales. Operating earnings in the third quarter was NOK 73 million compared to negative operating earnings of NOK 52 million in the second quarter of 2017. Net loss in the third quarter was NOK 9 million compared to a net loss of NOK 546 million in the second quarter 2017, mainly due to non-cash currency effects on debt and changes in the valuation of power contracts. Cash flow from operations declined to a negative NOK 162 million in the quarter from a positive NOK 187 million in the second quarter. Net interest-bearing debt increased by NOK 459 million to NOK 7 038 million in the third quarter, reflecting a negative cash flow for the period and unpaid interest costs related to the ongoing recapitalization process. At the end of the third quarter, the group had a negative book equity of NOK 689 million.

As part of the ongoing recapitalization process, the board has decided not to pay interest on the group's outstanding debt. The cash balance at the end of the third quarter was NOK 426 million and is sufficient to support the operations until a recapitalization solution takes place. Norske Skog's board and administration continue discussions with the creditors to launch as soon as possible a new and broadly supported offer for converting debt to equity and a new bond.

- We are very pleased with the high production efficiency at the mills considering the difficult financial position of the group. Rising input factor costs combined with an improved market balance, reflecting significant capacity closures and conversions in the industry this year, demands higher publication paper price into 2018, says Lars P.S. Sperre, CEO of Norske Skog.

Key figures, third quarter of 2017 (NOK million) Q3 2017 Q2 2017 Q3 2016 2016 Operating revenue 2 911 2 848 2 918 11 849 Gross operating earnings 143 190 251 1 049 Gross operating margin (%)4.9 6.7 8.6 8.9 Gross operating earnings after depreciation -11 32 95 367 Restructuring expenses -2 -10 -1 -67 Impairment - - - -1 238 Other gains and losses 85 -75 20 -127 Operating earnings 73 -52 114 -1 065 Share of profit in associated companies - -46 -3 -211 Financial items -75 -445 84 1 044 Income taxes -8 -3 -5 538 Profit/loss for the period -9 -546 190 306 Cash flow from operations -162 187 19 230 Net interest bearing debt 7 038 6 579 6 172 6 302 Capacity utilization rate (%) 94 91 93 93

Outlook Higher input factor costs are headwinds for Norske Skog into 2018. The market balance for publication paper in Europe is supported by capacity closures and conversions in the industry. The resulting high operating rate as well as cost pressure from raw materials lead to price increase expectations for 2018.

A structural demand decline domestically in Australasia is a challenge, while higher export prices for newsprint to low-margin markets in Asia offset some of this decline. Both Norske Skog's margin improvement program and the diversification strategy can not be fully implemented before the group's recapitalization is in place.

The board of directors and the management are still working to bring together the creditors to find a joint recapitalization solution for the group. Segment information Total annual production capacity for the group is 2.7 million tonnes. In Europe, the group capacity is 2.0 million tonnes, while in Australasia the capacity is 0.7 million tonnes. Capacity utilization for the group in the third quarter was 94% compared with 91% in the second quarter.

Europe Operating revenue increased from the previous quarter with higher sales volumes more than offsetting headwind from NOK appreciation. Both variable costs per tonne and fixed costs were relatively unchanged in the quarter. Despite an increase in volume, gross operating earnings declined due to NOK appreciation. Demand for newsprint in Europe decreased by 7% through August this year compared to the same period last year. SC magazine paper demand increased by 1%, while demand for LWC magazine paper declined by 3%. Capacity utilisation was 94% in the period.

Australasia Operating revenue decreased from the previous quarter despite flat sales volumes, partly reflecting relatively more export sales to Asia at lower prices compared to domestic prices. USD depreciation further impacted the exports negatively as Asian prices are in USD.

Both variable cost per tonne and fixed costs were relatively unchanged in the quarter. Gross operating earnings declined as the previous quarter included a CO2 compensation and due to less domestic demand resulting in more export sales at lower margins. Demand for newsprint in Australasia declined by 17% through August this year compared to the same period last year. Demand for magazine paper declined by 6%. Capacity utilisation was 94% in the period.

Margin improvement program Norske Skog has initiated a margin improvement program, "Formula 18", for a range of ongoing and a number of new initiatives across the group. The program focuses on profitability enhancements in the paper operations. The various initiatives add up to an annual gross operating earnings contribution of around NOK 500 million, all other equal, from 2019. The program includes both revenue enhancing measures and cost reduction efforts. Realized margin improvements will be sensitive to currency movements, sales prices and input factor costs. As investments amounting to around NOK 200 million is required to realize the full potential of all initiatives. The program can not be fully implemented before the recapitalization takes place.

Diversification beyond publication paper Norske Skog has identified related new business with a potential to generate more than 25% of the group's gross operating earnings. The identified projects include green investments like biogas and wood pellets in addition to production of tissue paper. Norske Skog is also involved in research and development to enhance the use of renewable biomass in replacing existing fossil based products. This includes both new building materials and biosolvents for pharmaceutical and agrichemical industries. As these new business require substantial funding, the implementation of the diversification strategy has been negatively impacted by the ongoing recapitalization process.

Presentation and quarterly material A recorded webcast of the CEO presentation, the quarterly financial statements and the presentation package are available on www.norskeskog.com. If you want to receive future Norske Skog press releases, please subscribe through the website of the Oslo stock exchange www.newsweb.no.

Norske Skog Communications and Public Affairs For further information:

Norske Skog media: Vice President Corporate Communication Carsten Dybevig Mob: +47 917 63 117 Twitter: @Norske_Skog Norske Skog financial markets: Vice President Investor Relations Tom Rogn Mob: +47 948 55 659

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Meaningful progress with holders of the NSF facility and the Perpetual Notes

2017-11-03

Norske Skog has over the last few days made meaningful progress with the holders of the EUR 100 million NSF facility and the majority holder of the 2115 Perpetual Notes towards find a mutual acceptable solution where these financial instruments are included in the consensual recapitalization of the Norske Skog group. If a solution is achieved, Norske Skog will have received indicative support from the requisite majority of all relevant financial instruments in the Norske Skog capital structure.

Due to the need to include a solution for the NSF facility and the Perpetual Notes in the overall recapitalization proposal, a new consent solicitation to the secured and unsecured noteholders will need to be launched. It is not anticipated that the updated consent solicitation will include any material changes to the terms set out in the current consent solicitation statement. As a new consent solicitation will have to be launched, the current consent solicitation will not be extended and will therefore expire on 3 November 2017 at 17:00 CET.

- We are pleased to have meaningful progress towards a solution with the holders of the NSF facility and the majority holder of the Perpetual Notes. We remain optimistic that a consensual solution will be achieved, and that the final pieces of this long process will fall into place. Hopefully, we can launch an updated consent solicitation as soon as possible to incorporate the various elements of the solution with the holders of the NSF facility and the Perpetual Notes. If formal support is achieved at the same levels as indicated for the ongoing consent solicitation, the recapitalization will move on to be completed via Schemes of Arrangement under English law", said Mr. Christen Sveaas, Chairman of Norske Skogindustrier ASA.

The recapitalization transaction will need the support of existing shareholders of Norske Skogindustrier ASA, with a 2/3 majority in an extraordinary general meeting. An extraordinary general meeting will be called for shortly after expiry of the updated consent solicitation. All the major shareholder groups of Norske Skogindustrier ASA have continued to indicate their support for the consensual recapitalization solution between the Unsecured Committee and the Senior Secured Noteholder Committee.

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.no

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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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
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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