Current report No. 7/2019

Dated: 28 May 2019

Subject: Publication of the delayed inside information regarding breachof financial covenants in the terms of issue of the Bonds

General legal basis: Art. 17 sec. 1 MAR - inside information

In relation to publication on 28th May 2019 of the financial results forthe 1st quarter of 2019, the Management Board of Arctic Paper S.A. (the"Issuer"), herby provides to the public the following inside informationidentified in course of the works on their preparation. Acting pursuantto Article 17(4) of Regulation (EU) No 596/2014 of the EuropeanParliament and of the Council of 16 April 2014 on market abuse (marketabuse regulation) and repealing Directive 2003/6/EC of the EuropeanParliament and of the Council and Commission Directives 2003/124/EC,2003/125/EC and 2004/72/EC ("MAR"), the Issuer, on 14 May 2019, decidedon its publication.

Contents of the delayed inside information

"Acting pursuant to Article 17(1) of Regulation (EU) No 596/2014 of theEuropean Parliament and of the Council of 16 April 2014 on market abuse(market abuse regulation) and repealing Directive 2003/6/EC of theEuropean Parliament and of the Council and Commission Directives2003/124/EC, 2003/125/EC and 2004/72/EC ("MAR"), the Management Board ofArctic Paper S.A. (the "Company") hereby informs that, in the course ofthe works on the preparation of the Company's financial results for the1st quarter of 2019, it became aware of a breach of a financial covenantof Net Debt/EBITDA ratio (as those terms are defined in the terms ofissue of the Bonds) for the 1st quarter of 2019 relating to theCompany's series A Bonds, ISIN code: PLARTPR00038, issued pursuant tothe terms of issue dated 30 September 2016 (the "Bonds").

Pursuant to the terms of issue of the Bonds, as a result of theaforesaid breach of the financial covenants, the holders of the Bondsare entitled (on the terms described in the terms of issue of the Bonds)to demand that a bondholders' meeting be convened in order to make adecision on the possible exercise of the right to early redemption ofthe Bonds.

At the same time, the Management Board explains that preventive andremedial actions have been taken in order to prevent any potentialnegative effects that may occur due to the breach of the terms of issueof the Bonds. Therefore, depending on the effect of those actions, thebreach of the financial covenants alone might not lead to the holders ofthe Bonds becoming entitled to exercise the right to redeem the Bondsearly or have other potential negative effects for the Company.

In particular, as part of the actions referred to above, the Companyinitiated talks with the entity acting as, inter alia, the issuing agentof the Bonds, i.e. Haitong Bank S.A. Spółka Akcyjna Oddział w Polsce,inter alia in order to obtain a waiver from the holders of the Bonds oftheir right to redeem the Bonds early on the terms described in theterms of issue of the Bonds."

In the opinion of the Management Board of the Issuer delay of thepublication of the inside information was in the Issuer's reasonableinterests, because its disclosure at the time of delay could make itdifficult to implement effectively the preventive and remedial actionsthat have been taken by the Issuer.

Specific legal basis:

Art. 17 sec. 1 of Regulation (EU) No. 596/2014 of the EuropeanParliament and of the Council of 16 April 2014 on market abuse (marketabuse regulation) and repealing Directive 2003/6/EC of the EuropeanParliament and of the Council and Commission Directives 2003/124/EC,2003/125/EC and 2004/72/EC.