Norske Skog - successful participation level for the 2017 exchange offer

Norske Skog announced, on 18 March 2016, an amended exchange offer to holders of the senior notes due in 2017 for a mix of new unsecured parent company notes due in December 2026 and perpetual notes. The purpose was to achieve maturity extension, debt reduction, reduced annual cash interest payments and strengthening of the balance sheet. The offer to holders of the 2017 notes to exchange their 2017 Notes for new notes due 2026, perpetual notes and the right to subscribe for equity (the "exchange offer") expired today at 13:00 (CET).

As of the expiration of the exchange offer, note holders of approximately 77% of the aggregate principal amount of the 2017 notes have submitted instructions to vote in favour of the exchange offer proposal at the upcoming noteholder meeting. Approximately 76% of the aggregate principal amount of the 2017 notes have accepted to participate in the Exchange Offer. This is above the 75% required threshold to bind all of the outstanding 2017nNotes to the terms of the exchange offer.

The noteholder meeting is scheduled for Monday, 11 April 2016, and the board of directors is then expected to make a formal resolution about the execution of the exchange offer transactions.

- We are very pleased with the high participation rate among the 2017 noteholders for the exchange offer. If the exchange is formally approved at the noteholder meeting, we have succeeded in protecting value for all stakeholders by realizing immediate de-leveraging, improving book equity by more than NOK 1 billion, reducing the cash interest level by more than NOK 100 million per year and extending debt maturities, said Mr. Sven Ombudstvedt, President and CEO of Norske Skog.

The new unsecured notes due in 2026 will, as the existing 2017 notes, rank junior to the EUR 290 million senior secured notes (SSN) due in December 2019, and the EUR 159 million 2021 and USD 61 million 2023 guaranteed unsecured notes.

In March 2016, Norske Skog entered into a financing arrangement with GSO Capital Partners LP (GSO) and Cyrus Capital Partners, L.P. (Cyrus) relating to a number of initiatives intended to strengthen Norske Skog's equity and liquidity position. GSO and Cyrus subscribed for EUR 15 million in new ordinary shares of Norske Skog. Norske Skog will in the near future offer existing shareholders the opportunity to subscribe for shares in a subsequent repair offering. 

In addition, GSO and Cyrus provided a new securitization facility of approximately EUR 100 million. The facility is secured by the receivables and inventory of the Norwegian mills and related collection bank accounts, and the inventory of the Golbey mill. 

- After these transactions, we have significantly improved our liquidity, strengthened our balance sheet and extended our maturity profile. We will now concentrate our efforts in developing and improving our business units, says Mr. Sven Ombudstvedt, President and CEO of Norske Skog. 

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