Strong shareholder support for the recapitalization

2017-10-19

All the major shareholder groups of Norske Skogindustrier ASA have indicated their strong support for the consensual recapitalization solution between the Unsecured Committee and the Senior Secured Noteholder Committee reached yesterday.

Among the 20 largest shareholders, who control about 38 % of the total number of shares in Norske Skogindustrier ASA, there are already over 75 % support for the recapitalization proposal. At the last general meetings, there have been about 35 - 40 % attendance from the shareholders, where the largest shareholders would constitute more than 90 % of the votes. The transaction will need the support of existing shareholders of Norske Skogindustrier ASA, with a 2/3 majority in an extraordinary general meeting. Among the 20 largest shareholders, there are some nominee accounts, where the shareholder is not known to the public or the company. Such nominee accounts represent almost 20 % of the total number of shares controlled by the 20 largest shareholders, and their vote is therefore unknown to the company.

"We are pleased to see that all known major shareholders will support the recapitalization transaction. As repeatedly stated, all alternatives to a consensual solution will entail significantly less value for all parties and rather complicated insolvency processes. If the proposal is successful, the transaction will reduce the group's gross debt from approximately NOK 9 billion to approximately NOK 3 billion and reduce annual cash interest costs from approximately NOK 600 to 200 million", says Mr. Christen Sveaas, chairman and the largest shareholder of Norske Skogindustrier ASA.

The formal consent solicitation deadline is Wednesday 25 October at 17:00 CET to allow adequate time for the group's noteholders to submit their formal consents. So far, over 80% of the EUR 290 million senior secured noteholders and more than 50% of the unsecured noteholders have indicated their willingness to support the adjusted recapitalization proposal. An extraordinary general meeting will be called for shortly after the expiry of the consent solicitation offer period. The transaction also needs the support of the holders of the EUR 100 million NSF facility due in 2020 and the perpetual notes due in 2115.

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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Final solution with creditor committees reached

2017-10-18

The board of directors and management of Norske Skog are pleased to announce that it has managed to broker a consensual solution between the Unsecured Committee, the Senior Secured Noteholder Committee and major shareholders. The two bondholder committees and the major shareholders have agreed on a split of the equity ownership of Norske Skogindustrier ASA, following the recapitalization transaction that these groups will support. With this development, over 80% of the senior secured noteholders and more than 50% of the unsecured noteholders have now indicated their willingness to support such an adjusted recapitalization proposal.

Therefore, the relevant boards in the Norske Skog group have resolved to revise the terms of the ongoing consent solicitation in accordance with the split agreed. The formal consent solicitation deadline is extended until Wednesday 25 October at 17:00 CET to allow adequate time for the group's noteholders to submit their formal consents.

"We are very pleased that the representatives of the bondholder committees and shareholders have bridged the gap in economic distance, and that a material portion of our largest creditors and shareholders are supportive of the recapitalization proposal. Now, I urge all stakeholders of the Norske Skog group to provide their consents to the recapitalization proposal so that the requisite consent thresholds can be reached. As repeatedly stated, all alternatives to a consensual solution will entail significantly less value for all parties and rather complicated insolvency processes", says Mr. Christen Sveaas, chairman of Norske Skogindustrier ASA.

Compared to the recapitalization proposal launched on 11 October, the changes made to the split of the equity ownership of Norske Skogindustrier ASA after the recapitalization (before any new money offering) will be as follows (11 October proposal in parentheses):

a. Secured noteholders: 90.75 % (91.0 %) b. Unsecured noteholders: 6.75 % (6.3 %) c. Existing shareholders: 2.50 % (2.7 %)

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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Financial calendar

2017-10-11

Financial calendar for Norske Skogindustrier ASA

FINANCIAL YEAR 2017

23.11.2017 - Quarterly Report - Q3 08.02.2018 - Quarterly Report - Q4

This information is published pursuant to the requirements set out in the Continuing obligations.

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OSLO BØRS - MATCHING HALT ENDS

2017-10-11

See announcement issued by NSG today at 14:00 CET. Matching halt to end at 14:15 CET.

There will be a Re-Opening Auction Call until 14:20 CET.

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The boards' final recapitalization proposal

2017-10-11

Norske Skog today announces a proposal, which has been shaped by discussions with all stakeholder groups and reflects the final terms, which the committee of senior secured bondholders have indicated their willingness to support, in an attempt to provide the group with a sustainable capital structure for the future. If this proposal is not successful, certain holders of the group's senior secured notes may conclude that the only realistic path open to them will to be to enforce their security. Therefore, the relevant boards consider this proposal to be the final opportunity to reach a consensual solution among all bondholders and shareholders. So far, more than 65% of the secured bondholders and major shareholders of the group have indicated their willingness to support the recapitalization proposal upon launch.

"It has been an intensive negotiation period between the various stakeholders. It is the board's assessment that this is the only implementable consensual proposal given the unsecured bondholders and the shareholders' positions. 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", says Mr. Christen Sveaas, chairman of Norske Skogindustrier ASA.

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

"The new consensual proposal will give more value to unsecured bondholders and shareholders than the board's proposal as of 18 September 2017. Although the new proposal also will result in significant losses for the group's bondholders and material dilution for its shareholders, all other options will be worse for the unsecured bondholders and the shareholders. If the recapitalization proposal is effected, it will provide a solid platform for our seven business units in the future," says Mr. Christen Sveaas.

The key terms of the proposed recapitalization transaction are:

- Issuance of a new senior secured EUR 250 million bond loan carrying 8.5 % interest with a 2022 maturity to the owners of the EUR 290 million bond loan and the EUR 100 million NSF-facility. The new bond loan will have the same collateral security as today's secured debt. The existing claims of the secured bond loan holders and NSF-lenders in excess of EUR 250 million, including accrued interest, will be converted to equity.

- The conversion into equity of all outstanding unsecured bond debt amounting to approximately EUR 500 million including accrued interest.

- After such conversions, the equity ownership of Norske Skogindustrier ASA will be split as follows: a. Secured note holders: 91.0 % b. Unsecured noteholders: 6.3 % c. Existing shareholders: 2.7 %

- The board will propose an equity offering by Norske Skogindustrier ASA of up to approximately NOK 500 million with preferential rights for existing unsecured bondholders and shareholders, allocated by approximately NOK 300 million to the unsecured bondholders and approximately NOK 200 million to the shareholders. If fully subscribed, this will entail an increase in their ownership interest from 9 % to approximately 28 %. The subscription price will be set at a valuation of 6x the revised 2017 GOE guidance of EUR 75 million.

- Warrants will be issued for up to 10 % of the equity in Norske Skogindustrier ASA to those who have subscribed to the above equity offering. The warrants entitle the holders to subscribe for shares if the sum of the group's average net debt and market value exceeds EUR 525 million in a consecutive period of 6 months prior to 30 June 2019. The subscription rights expire worthless on 30 June 2019 if not exercised.

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

The bondholders have 7 business days, until Thursday 19 October 2017 (17:00 CET), to accept the proposal. The proposal will be implemented by creditor schemes of arrangement undertaken in the English courts. Such schemes of arrangement require 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) as well as the support of the holders of the EUR 100 million NSF facility due in 2020 and the perpetual notes due in 2115.

If the recapitalization proposal is not successful, 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 Norwegian courts. This will in all likelihood result in the loss of all value for the unsecured bondholders and the existing shareholders. Therefore, these boards recommend that all bondholders and shareholders approve the proposal.

If the proposal is not successful, it is likely that the secured note holders will conclude that the only realistic path open to them will be to enforce upon their security over the shares in Norske Skog AS, which owns all operating units. Consequently, the business operations of the group will be transferred to new owners with little or no recovery for the unsecured bondholders and the existing shareholders. "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 business operations at our seven paper mills 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.

All holders of relevant Norske Skog bonds must vote on the proposal 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

Trading update

Quarter ending September 30, 2017:

The Group's next quarterly report will be for the quarter ending September 30, 2017 and it is expected to be announced November 23, 2017. The information in this section for the third quarter of 2017 is based on available preliminary financial information, and is subject to change. Undue reliance should not be placed on this information under "Profit and Loss", "Balance sheet" and "Outlook" below. This information has been prepared by, and is the responsibility of, the Group's management, and has not been audited, reviewed or verified. No procedures have been completed by the Group's auditors or the Solicitation Agent with respect thereof, and undue reliance should not be placed thereon. This information is subject to confirmation in the Group's unaudited quarterly report for the quarter ending September 30, 2017.

Profit and Loss:

Europe. Gross operating earnings declined from NOK 123 million to around NOK 100 million despite higher sales volumes when compared to the previous quarter. The decrease mainly reflected a negative currency effect of approximately NOK 30 million due to the strengthening of NOK.

Australasia. Gross operating earnings declined from NOK 77 million to around NOK 40 million despite flat sales volumes. A relatively higher share of newsprint export sales to Asia and higher costs of energy contributed to the decrease. The regional gross operating earnings in the second quarter of 2017 was impacted positively by CO2 compensation at the Tasman mill.

The Group's gross operating earnings decreased from NOK 190 million in the second quarter of 2017 to around NOK 140 million in the third quarter of 2017. The gross operating earnings for the third quarter of 2017 is in line with the guiding of approximately NOK 710 million in gross operating earnings for the full year 2017, but somewhat impacted by the challenging Group financial situation with a high focus on liquidity.

Balance sheet:

The Group's book equity deteriorated further in the third quarter of 2017, reflecting a loss for the period as a result of depreciation charges and interest costs. Cash and cash equivalents amounted to NOK 426 million at the end of September 2017 (as compared with NOK 396 million at the end of August 2017). The delayed interest payments at the end of September 2017 amounted to around NOK 295 million, improving cash flow in the period (accrued interest payments at the end of September amounted to around NOK 450 million). Around NOK 240 million of the cash and cash equivalents were restricted at the end of September 2017 (as compared with NOK 263 million at the end of August 2017). The Group's operations require around NOK 200 million in freely available cash to handle intra monthly liquidity fluctuations.

Outlook:

In recent discussions with bondholders, the following projections for the Group have been applied: - Operating revenues were projected at NOK 12.0 billion for each of 2017, 2018 and 2019. - Gross operating earnings were projected at NOK 710 million for 2017 and at around NOK 850 million for each of 2018 and 2019. - Capital expenditures / investing cash flows were projected at NOK 300-350 million for 2017, and just below NOK 200 million for each of 2018 and 2019 due to an assumption of no funding available for development investments. - Free cash flow available for debt service was projected at just below NOK 400 million for 2017 and at around NOK 550 million for each of 2018 and 2019.

The information in the "Outlook" section above contains "forward- looking statements" and financial projections. We do not typically make long- term projections as to future operating revenues, gross operating earnings, capital expenditures, free cash flow or other results for extended periods due to, among other things, the unpredictability of the assumptions and estimates underlying such projections. The projections and forward- looking statements contained herein have not been prepared with a view toward public disclosure, and the inclusion of this information should not be regarded as an indication that we consider it to be predictive of actual future results. While presented with numeric specificity, the financial projections contained herein reflect numerous estimates and assumptions with respect to publication paper market conditions and prices, general economic conditions, our capital structure and capital expenditure program and other matters specific to our business, all of which are difficult to predict and many of which are beyond our control. There is significant risk that our current estimates and assumptions may not be accurate and that our actual results will vary significantly from our projected results. Since our projections cover multiple years, such information by its nature becomes less predictive guidance. Our business plan and projections likely will also be subject to significant modification if the recapitalization proposal is implemented (or an alternative capital structure solution is implemented), and thus would be superseded in their entirety by such modified business plan.

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. 11 October 2017

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
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