ARCTIC PAPER : No. 19/2017 - Investment in Arctic Paper Kostrzyn S.A. – increase of production capacity in the Mill

Current report number 19/2017

Dated: 15 December 2017

Subject: Investment in Arctic Paper Kostrzyn S.A. - increase of production capacity in the Mill

Legal basis:

Art. 17.1

of MAR - inside informationContent:

The Management Board of Arctic Paper S.A.("Company") herewith informs that on 14 December 2017, together with the Supervisory Board it took a decision to launch an investment project in the

Company's subsidiary Arctic Paper Kostrzyn S.A. with the aim to expand the latter's production capacity by modernising the Mill.

The aim of the project is to increase the Mill's annual production capacity to 315,000 tonnes of fine paper, compared to 285,000 tonnes today. The investment, estimated at approximately EUR 10m (approx.

PLN 42m), will be financed with funds from tranche B of the investment loan from the European Bank of Reconstruction and

Development (the Company informed about the conclusion of the investment loan facility agreement in its current report No. 20/2016 dated 9 September 2016). The project is planned for completion in the first half of 2019.

Apart from expanding the Mill's capacity, the planned investment will increase the resource and operating efficiency of the Kostrzyn

Mill. It will increase competitiveness of the Group's products and influence future operational results of the Group.

Specific legal basis:

Art. 17.1 of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European

Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC.

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