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24 October 2017, 15:16 CET

Axactor Group

Stock notice

Axactor and Geveran enter into binding agreements for the establishment of the Portfolio Investment Company

Oslo, 24 October 2017 - Reference is made to the announcement of

14 August 2017 that Axactor AB (publ) ("Axactor") and Geveran

Trading Co. Limited, a company indirectly controlled by trusts

established by Mr. John Fredriksen for the benefit of his

immediate family ("Geveran"), had signed a letter of intent

regarding the establishment of a jointly owned portfolio

investment company (the "Portfolio Investment Company"). Axactor

is pleased to announce that the investment partnership agreement

(the "Investment Partnership Agreement") for the establishment of

the Portfolio Investment Company has now been entered into.

As previously announced, the Portfolio Investment Company will

focus on larger portfolios above EUR 30 million in Capex and have

a first right of refusal on such portfolios. The Portfolio

Investment Company will invest in new portfolios for a period of

24 months after which the Portfolio Investment Company will

continue to manage the portfolios acquired up until then. Axactor

will continue to acquire commercially attractive portfolios below

the EUR 30 million threshold on its own. The Portfolio Investment

Company may acquire portfolios below EUR 30 million that Axactor

does not acquire. The country operating subsidiaries of Axactor

will enter into service agreements with the Portfolio Investment

Company for the purpose of sourcing, managing and collecting on

portfolios acquired and owned by the Portfolio Investment Company.

The Portfolio Investment Company will be capitalised with minimum

share capital of EUR 12,000 and with additional capital in the

form of deeply subordinated income sharing notes (the "Income

Sharing Notes") in the total amount of EUR 60 million. Axactor and

Geveran will each own 50 per cent of the share capital of the

Portfolio Investment Company, and each of Axactor and a company

affiliated with Geveran will invest EUR 30 million in the Income

Sharing Notes. The affiliate of Geveran has also committed to

provide additional financing in the form of subordinated loan

notes (the "Subordinated Loan Notes") in the amount of EUR 120

million with an interest margin of 650 bps over EURIBOR. In

addition, the Portfolio Investment Company has obtained commitment

from a leading Nordic bank for a senior secured debt facility (the

"Senior Secured Debt Facility") in the amount of EUR 120 million

with a two year tenor whereof 40 million is an accordion facility.

It is expected that final documentation for the Income Sharing

Notes, the Subordinated Loan Notes and the Senior Secured Debt

Facility will be completed in early Q4 2017.

Subject to final loan documentation, the Portfolio Investment

Company will have a total investment capacity of around EUR 300

million and a highly competitive capital structure with attractive

equity returns.

Both Axactor and Geveran will be represented in the Board of

Directors of the Portfolio Investment Company and will have veto

rights on major decisions such as portfolio acquisitions and

additional financing of the Portfolio Investment Company. Axactor

will prepare and present business cases for portfolio purchases

within the scope of the Portfolio Investment Company's business

objective to the Board of Directors of the Portfolio Investment

Company. The Investment Partnership Agreement also includes other

customary provisions for this type of partnerships.

"We are very pleased to have entered into binding agreements for

the establishment of the Portfolio Investment Partnership and soon

be ready to make portfolio acquisitions in line with the plan that

was communicated earlier. The Portfolio Investment Company alone

has capacity to invest close to EUR 300 million with the total

financing that has been secured at an attractive cost of capital.

We see a strong pipeline of opportunities of portfolios of all

sizes." says Endre Rangnes, CEO of Axactor.

DNB Markets, a part of DNB Bank ASA is acting as financial adviser

and Advokatfirmaet Haavind AS is acting as legal adviser to

Axactor in relation to the Portfolio Investment Company.

For additional information, please contact:

Endre Rangnes, CEO Axactor

Mobile phone: +47 4822 1111

Email: endre.rangnes@axactor.com

or

Geir Johansen, CFO & Investor Relations, Axactor

Mobile phone: +47 4771 0451

Email: geir.johansen@axactor.com