30 Jan 2006

Norske Skog sells Catalyst Paper shares

Norske Skog has agreed to sell all its 63 million shares, corresponding to a 29.4% holding, owned by the Norwegian-based company in Canada's Catalyst Paper. Proceeds are expected to be in the region of NOK 1,080 million and yield an accounting loss of roughly NOK 730 million on the book value. A provision for the loss will be made in the accounts for the fourth quarter of 2005.

The shares will be acquired in a transaction in Canada  by a syndicate headed by  a subsidiary of UBS Securities Canada Inc (UBS) at the agreed price of CAD 2.98 each. Closing of this transaction is expected in mid-February.
 
The Catalyst shares have not been registered under the United States Securities Act of 1933 and may not be offered or sold within the United States except pursuant to an exemption from the registration requirements of that Act. 
 
This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Catalyst shares in any jurisdication in which such offer, solicitation or sale would be unlawful.
 
Norske Skog's gearing (net interest-bearing debt divided by equity) and certain other key figures will be improved by the disposal of the Catalyst Paper shares. The accounting loss has no effect on tax cost.
 
"Even if this transaction causes a significant loss, it is the right thing to do for Norske Skog, says Jan Oksum, president and CEO of Norske Skog. "Through this, we will improve our possibilites to  strengthen our activities in Europe, Asia, Australasia and South America."
 
Norske Skog originally held 50.8% of the Catalyst Paper shares, acquired through the purchase of Fletcher Challenge Paper in 2000. The company was then called Fletcher Challenge Canada.
 
Norske Skog has since then successively reduced its holding to 29.4%. Catalyst Paper ranks today as the third largest manufacturer of publication paper in North America, with four mills located close to each other in British Columbia.
       
 
Oxen°en, 30 January 2006
Norske Skog
Corporate communications
 
Further information from:
Media: Hanne Aaberg, senior vice president, Norske Skog, tel: +47 67 59 90 29 or +47 91 35 16 81
Financial market: Rune Gjessing, vice president, Norske Skog, tel: +47 67 59 90 73 or +47 90 15 26 14
 
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.
ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW.