Axactor and Geveran enter into co-investment partnership securing EUR 300 million in investment capacity

Axactor and Geveran will both invest

EUR 30 million of equity and hold a 50 per cent ownership each. In

addition, Geveran will provide a subordinated debt facility of up to

EUR 120 million. The Portfolio Investment Company will in addition

seek bank financing. The targeted investment capacity of the

Portfolio Investment Company will be around EUR 300 million.

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 EURm 30

that Axactor does not acquire. Axactor will have an exclusive service

agreement with the Portfolio Investment Company under which Axactor

will manage and collect the claims owned by the Portfolio Investment

Company. Axactor will charge the Portfolio Investment Company a 5 per

cent mark-up on debt collection services.

The Portfolio Investment Company will be capitalised with EUR 60

million of equity, a subordinated debt facility with Geveran (or one

of its affiliates) of EUR 120 million and bank financing of around

EUR 120 million. The subordinated debt facility will have a 5 year

tenor with an interest margin of 650 bps over EURIBOR. Consequently,

the Portfolio Investment Company will have a target leverage of up to

80 per cent loan-to-value securing a highly competitive capital

structure with attractive equity returns.

"We are very pleased to have Geveran as our co-investment partner.

They have long experience in the sector and significant capital

available. This partnership enables Axactor to substantially increase

our total investment capacity, and is an important strategic

milestone for the company. We can pursue larger acquisitions while

optimising the cost of capital and managing the risk of larger

purchases. The service agreement between Axactor and the Portfolio

Investment Company will secure immediate and attractive cash flow

generation to Axactor, while the capital structure of the Portfolio

Investment Company will secure attractive equity returns to the

Axactor shareholders", says Endre Rangnes, CEO of Axactor.

Axactor and Geveran will each have 50 per cent of the representatives

of the Board of Directors of the Portfolio Investment Company.

Axactor will prepare and present the business case for portfolio

purchases within scope to the Board of Directors of the Portfolio

Investment Company. Each party shall have veto right regarding

portfolio purchases.

The establishment of the Portfolio Investment Company is subject to

the parties entering into final agreements. The target is for the

Portfolio Investment Company to be operational from early Q4 2017.

Related to the establishment of the Portfolio Investment Company,

Axactor has resolved to grant 130,000,000 American style warrants in

Axactor to Geveran with an exercise price of NOK 3.25. The warrants

will only be exercisable if the Portfolio Investment Company is

established, and will expire 2 years thereafter. The warrants are

subject to customary recalculation provisions following certain

capital events.

Endre Rangnes, CEO of Axactor, Oddgeir Hansen, Chief Operating

Officer of Axactor and Johnny Tsolis, Executive Vice President,

Strategy & Projects of Axactor, have agreed to enter into a 2 year

lock-up undertaking in relation to the shares currently owned by

them.

DNB Markets, a part of DNB Bank ASA, acted as financial adviser for

Axactor relating 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