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EWOS Sale to Altor and Bain Capital Completed

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CANADA - With reference to the stock exchange notification 23 July 2013, the sale of EWOS Group from Cermaq to Altor Fund III and Bain Capital has now been completed.

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The transaction was closed at the previously announced enterprise value of NOK 6.5 billion. Cermaq has now received a consideration from the buyers of NOK 6.2 billion. Final consideration is dependent on certain events to be settled in accordance with the Share Purchase Agreement (SPA) at a later stage. Cermaq reiterates its previous estimates of a gain to be reported of NOK 2.0-2.5 billion and an extraordinary dividend of NOK 4.5-5.0 billion (equivalent to NOK 48-54 per share) on the back of the transaction.

The consideration received as part of the closing reflects the enterprise value of NOK 6.5 billion, adjusted for certain items as agreed between the parties in the SPA, the contingent consideration of NOK 180 million in specific overdue receivables and cash in EWOS at closing, which also result from cash flow generation between signing and closing.

The adjustment items consist mainly of certain supply financing and factoring arrangements in Chile which have been considered as net working capital in Cermaq while it was agreed as a reduction to the consideration in the SPA.

The contingent consideration of NOK 180 million will, as described in the stock exchange notification, be paid upon EWOS receiving payment from two customers in Chile. Based on current processes and the agreement between EWOS Chile and these customers, Cermaq continues to expect the contingent consideration to be made in full, but can at this stage not provide more information with regards to the timing of such expected payments.

The buyers have waived the potential request for a time limited back-up facility of NOK 260 million in Cermaq or alternatively a deferred consideration of NOK 130 million relating to certain supply financing arrangements. The proceeds received are therefore not reduced for any supplier financing support.

The consideration received at closing is based on estimates by the end of October with regards to net working capital and certain adjustment items agreed in the SPA. The final consideration will be based on a completion statement and may be adjusted for changes in such items as commented above and the actual net working capital per closing compared to the normalized level as defined in the agreement between the parties. Finalization of the processes to conclude the completion statement follows specific and standard procedures stated in the SPA and are expected to be completed before year end.

Out of the proceeds received, NOK 923 million will be directed to the early redemption of Cermaq outstanding bond as announced in the stock exchange notification 22 July 2013. Bond Investors can expect their notes to be redeemed on 5 November 2013.

Based on the estimated net assets as of closing of the transaction, the reported gain is still considered to be between NOK 2.0 and 2.5 billion. The estimated extraordinary dividend remains at NOK 48-54 per share. In addition to proceeds received, the proposed dividend will depend on the ongoing refinancing of Cermaq as well as updated cash flow projections for Cermaq for 2014. It is currently expected that an extraordinary shareholders meeting will be held late December 2013 to decide on the extraordinary dividend.

"The process for completing the sale of EWOS has been very good and the outcome is in line with our expectations," said CEO Jon Hindar in a comment to the closing of the transaction.

"I trust that this transaction will provide good development prospects for EWOS, its employees and the new owners, and Cermaq look forward to continue the strong and important collaboration with EWOS in the coming years," Mr Hindar concluded.

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