Current report no. 04/2021

Date of preparation: 5th February 2021

Subject: Commencement of negotiations regarding the conclusion of anagreement on significant financing for the Issuer's Group

General legal basis:

Art. 17 sec. 1 MAR - inside information

Content:

The Management Board of Arctic Paper S.A. ("Company", "Issuer") herebyreports that today it decided to proceed with negotiations of a newfacility agreement with selected banks in order to obtain funds for:

(i) the refinancing of the existing indebtedness of the Company and itssubsidiaries, resulting in particular from:

1.the term and revolving facilities agreement dated 9 September 2016 (asamended) concluded by the Company and its selected subsidiaries with aconsortium of banks composed of: BNP Paribas Bank Polska S.A., SantanderBank Polska S.A. and the European Bank for Reconstruction andDevelopment for a total amount of EUR 52,400,000 (fifty two million fourhundred thousand euro) and PLN 31,500,000 (thirty one million fivehundred thousand zlotys), the conclusion of which was reported by theCompany in current report no 20/2016 of 9 September 2016;

2.series A bonds in a total amount of PLN 100,000,000 (one hundredmillion zlotys) issued by the Company on 30 September 2016 (the"Bonds"), the issuance of which was reported by the Company in currentreport no 24/2016 of 30 September 2016; the Bonds were issued under abond issuance programme established pursuant to agreements concluded on9 September 2016 with Haitong Bank, S.A. Spółka Akcyjna Oddział w Polscerelated to the programme of the issue of the Company's bonds up to theamount of PLN 150,000,000 (one hundred and fifty million zlotys), theestablishment of which was reported by the Company in current report no20/2016 of 9 September 2016;

3.the intercreditor agreement concluded on 9 September 2016 by theCompany and its subsidiaries with BNP Paribas Bank Polska S.A.,Santander Bank Polska S.A., the European Bank for Reconstruction andDevelopment and Haitong Bank, S.A. Spółka Akcyjna Oddział w Polsce, theconclusion of which was reported by the Company in current report no20/2016 of 9 September 2016;

4.the factoring agreement dated 8 February 2017 (as amended) concludedby and between Arctic Paper Munkedals AB, the Company and BNP ParibasFaktoring sp. z o.o. with the total factoring limit being PLN 52,500,000(fifty two million five hundred thousand zlotys), the conclusion ofwhich was reported by the Company in current report no 04/2017 of 9February 2017; and

5.the factoring agreement dated 19 September 2019 (as amended) concludedby and between Arctic Paper Kostrzyn S.A. and Santander Factoring sp. zo.o. with the total factoring limit being PLN 30,000,000 (thirty millionzlotys), the conclusion of which was reported by the Company in currentreport no 22/2019 of 19 September 2019;

(ii) the financing of transaction costs (including but not limited tocosts, fees and other payments connected with refinancing of theexisting financial indebtedness), and

(iii) the financing of on-going corporate operations of the Company'scapital group (the "New Financing").

Based on preliminary financing proposals received from banks, theCompany anticipates the following main conditions of the New Financing:

1. total amount of financing: the equivalent of PLN 300,000,000 (threehundred million zlotys);

2. currency: PLN and EUR;

3. facilities: a term facility for a total amount of PLN 150,000,000(one hundred fifty million zlotys) divided into two equal tranches inPLN and ENR and a revolving facility for a total amount in EURequivalent to PLN 150,000,000 (one hundred fifty million zlotys);

4. financing period: five years for the term facility and three yearsfor the revolving facility, with an option to extend the terms of therevolving facility by two additional years (provided that the agreedterms for such extension have been met);

5. repayment conditions: the term facility will be repaid in equalinstalments paid every six months starting from November 2021 and therevolving facility will be repaid on the final maturity date;

6. interest rate: interest at a floating rate based on the WIBOR basereference rate in the case of financing in PLN and EURIBOR basereference rate in the case of financing in EUR and variable margin, thelevel of which will depend on the level of the net debt-to-EBITDA ratio;and

7. security interests: the security package will include customarysecurity interests established in transactions of this type, such as:registered pledge and financial pledge over shares in Arctic PaperKostrzyn S.A., pledges over shares in companies incorporated underSwedish law, i.e. Arctic Paper Munkedals AB and Arctic Paper GrycksboAB, statements on submission to enforcement by the Company and ArcticPaper Kostrzyn S.A., registered pledges and financial pledges over bankaccounts of the Company and Arctic Paper Kostrzyn S.A., pledges overbank accounts of Arctic Paper Munkedals AB and Arctic Paper Grycksbo AB,mortgages established on real properties of the Company and Arctic PaperKostrzyn S.A., mortgages established on real properties of Arctic PaperMunkedals AB and Arctic Paper Grycksbo AB, registered pledge over assetsof Arctic Paper Kostrzyn S.A. and security assignment agreements tosecure rights under property insurance policies.

The above-mentioned parameters of New Financing are preliminary and maybe changed in the course of negotiations with banks. Additionally, theCompany informs that negotiations with banks concerning New Financingmay, but need not necessarily end with an execution of a new facilityagreement.

The company will provide information on the completion of negotiationsand their result in a separate current report.

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.