Current report number 14/2023

Dated: 9th of August 2023

Subject: Construction of a biofuel installation and commencement ofnegotiations regarding the conclusion of an agreement on significantfinancing for the Issuer's Group

General legal basis:

Art. 17 sec. 1 of MAR - inside information

Content:

The Management Board of Arctic Paper S.A. ("Company", "Issuer") herebyreports that today it decided to proceed with negotiations on theagreement (the "Amendment Agreement") amending a term and revolvingfacilities agreement dated 2nd of April 2021 (as amended) the conclusionof which was published by the Company in current report no. 12/2021dated 2nd of April 2021(the _quot;Facilities Agreement_quot;) which was concludedbetween the Company as borrower and guarantor, the Company'ssubsidiaries as guarantors and a consortium of banks composed of: BankPolska Kasa Opieki S.A., BNP Paribas Bank Polska S.A. and Santander BankPolska S.A. (jointly: the _quot;Lenders_quot;) under which the Lenders will grantthe Company additional facility (the "Additional Facility") to financethe construction of a biomass drying and pellet production plant, whichwill be located in Grycksbo on a property owned by Arctic Paper GrycksboAB(the" Amendment Agreement").

The investment will reduce energy costs by approximately SEK 50 millionper year. In addition to electricity and steam, the installation willproduce approximately 50 thousand tons of pellets annually. According tothe Issuer's estimates, the investment will generate an annual revenueof approximately SEK 100 million from the sale of pellets.

The total estimated cost of the investment will amount to approximatelyEUR 28.5 million of which approximately EUR 8.5 million will be financedfrom equity funds, and its completion is planned for the first half of2025.

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

1. total amount of financing: the equivalent of EUR 20 million;

2. currency: EUR;

3. facilities: investment term loan;

4. financing period: seven years from the date of the conclusion of theAmendment Agreement;

5. repayment conditions: 67,5% of the Additional Facility will be repaidin equal instalments paid every six months starting from March 2026. Theremaining part will be repaid on the final maturity date of theAdditional Facility;

6. interest rate: interest at a floating rate based on the EURIBOR basereference rate and variable margin, the level of which will depend onthe level of the net debt-to-EBITDA ratio; and

7. security: Additional Facility will be secured with the same packageof securities established in connection with the Facilities Agreement.

The above-mentioned parameters of the Additional Facility arepreliminary and may be changed in the course of negotiations with banks.Additionally, the Company informs that negotiations with banksconcerning Additional Facility may, but need not necessarily end with anexecution of the Amendment Agreement.

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 ofthe European Parliament and of the Council of 16 April 2014 on marketabuse (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.