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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Broad support from bondholders, extension required

2017-10-31

Norske Skog has so far received support from a clear majority of both the secured and the unsecured noteholders for the proposed recapitalization solution. Norske Skog has now likely surpassed the thresholds required to implement the transaction by way of Schemes of Arrangement. However, the transaction is also contingent upon support from the majority holder of the EUR 100 million NSF and the 2115 Perpetual Notes.

The consent solicitation deadline is extended until Friday 3 November at 17:00 CET to allow sufficient time to allow for further discussions with the holders of NSF and Perpetual Notes.

- We are pleased that we have likely achieved the sufficient level of support for the recapitalization from both the secured and the unsecured noteholders to execute an implementation via Scheme of Arrangements under UK laws. We now expect that holders of the EUR 100 million NSF and Perpetual Notes show constructive flexibility to reach a consensual transaction for their holdings", said Mr. Christen Sveaas, Chairman of Norske Skogindustrier ASA.

Regardless of the outcome of the recapitalization process, the business operations at our seven paper mills will continue as normal. 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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Strong support for the recapitalization

2017-10-25

The board of directors and the management of Norske Skog are pleased to have received strong support from both secured and unsecured bondholders and shareholders for the proposed recapitalization solution. In direct dialogue with these holders, the vast majority are supportive of the proposal. The consent solicitation deadline is extended until Tuesday 31 October at 17:00 CET to allow sufficient time for holders to provide formal consent through their respective bond custodians and submit lock-up agreements to Lucid Issuer Services Limited as information and tabulation agent.

In relation to the secured and unsecured tranches and following direct dialogue with holders, the indications of support suggest that the thresholds required to implement the transaction by way of Schemes of Arrangement will be reached.

A consensual recapitalization proposal is also contingent upon support from the holders of the EUR 100 million Norwegian Securitization Facility due 2020 (NSF) and a majority of the 2115 Perpetual Notes. The extension period will allow holders to provide formal consent and submit lock-up agreements. The extension period will also be used to continue discussions with the holders of the NSF and holders of the 2115 Perpetual Notes to try to achieve support also from these two remaining creditor groups.

- We are pleased that practically all stakeholders targeted in the consent solicitation process are supporting for a consensual recapitalization of the current Norske Skog group. We will now spend time to ensure the registration and documentation of formal support for the recapitalization occurs. Equally important, we will do our outmost to obtain the support to the recapitalization from the holders of the NSF and the 2115 Perpetual Notes holders," said Mr. Christen Sveaas, Chairman of Norske Skogindustrier ASA.

Regardless of the outcome of the recapitalization process, the business operations at our seven paper mills will continue as normal.

If the requisite consent levels are not reached, the listed parent company Norske Skogindustrier ASA will likely file for debt negotiations or bankruptcy in the Norwegian courts. The secured creditors of Norske Skog AS will then likely enforce upon their security resulting in the operating business being transferred into new ownership.

Simultaneously with the efforts to gather the required consent for the recapitalization proposal, the board of directors and the management of Norske Skog are preparing a contingency plan if adequate consent for the recapitalization solution is not reached. As part of this plan, Norske Skog has involved financial advisors pursuant to the terms of the indenture for the 2019 Senior Secured Notes to perform a valuation of the group.

All holders of relevant Norske Skog bonds must provide their consents through their respective bond custodians, and are encouraged to contact the following persons on all matters related to the consent solicitation:

The Information and Tabulation Agent: Lucid Issuer Services Limited For information by telephone: +44 20 7704 0880 Attention: Yves Theis or Paul Kamminga Email: norskeskog@lucid-is.com

Norske Skog financial markets: Tom Rogn Vice President Investor Relations Mob: +47 948 55 659 E-mail: tom.rogn@norskeskog.com

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

Phone: +47 22 51 20 20
Main fax: +47 22 51 20 21
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Norske Skogindustrier ASA, PB 294 Skøyen, 0213 Oslo, Norway

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