EQS-Ad hoc: Cham Paper AG

Cham, 5 December 2017

Cham Paper Group sells its speciality paper business to Sappi Group

Cham Paper Group sells its speciality paper business to the South African Sappi Limited, one of the world's leading pulp and paper companies. The integration of the speciality paper business into the Sappi Group will open up new perspectives for the two high-performance plants of Cham Paper Group in Carmignano and Condino as well as for their employees and for the Digital Imaging team in Cham. The transaction is subject to the approval of anti-trust authorities. Following the divestment of the paper business, Cham Paper Group will focus on its real estate business. The group is pushing ahead the transformation of the «Papieri» area in Cham into a new, attractive urban quarter.

The Sappi Group, which is domiciled in Johannesburg and listed on the Johannesburg stock exchange, develops, produces and sells dissolving wood pulp, speciality, packaging and graphic paper, as well as biomaterials. It employs around 12,000 people with production facilities across 7 countries on 3 continents and customers in over 150 countries. It has focused its development in various areas of the speciality paper market. The integration of Cham Paper Group's speciality paper business into a strong, globally positioned Group will open up new opportunities for this business as regards procurement, market development, product innovation, expansion opportunities and staff development.

In recent months, the Cham Paper Group's Board of Directors has examined all strategic options for the company's future success following the relocation of the speciality paper production from Switzerland to Italy and the comprehensive modernisation of the plants in Carmignano and Condino. Although Cham Paper Group's profitable speciality paper business is well positioned today, it is still too small to develop its market position on its own in the long term. Accordingly, selling it to the Sappi Group is an optimal solution.

The sale of the speciality paper business requires a change in the corporate purpose of Cham Paper Group Holding AG. The shareholders may vote on the proposal at an Extraordinary General Meeting. The alteration of the company's purpose requires the approval of at least two-thirds of the votes represented at the General Meeting. In addition, the transaction is subject to the approval of anti-trust authorities. The transaction is expected to close in the first quarter of 2018.

Following the divestment of the speciality paper business, the company will focus on its real estate business and will operate under the name «Cham Group». The sale at an enterprise value of CHF 146.5 million will result (after deduction of bank debt, liabilities and cost) in an inflow of approximately CHF 125 million in cash to the Group. These financial resources increase the flexibility for the development of the «Papieri» project. For example, the resulting higher equity ratio means that a higher proportion of investment properties could be considered at the expense of the condominium ownership ratio. Real estate investments beyond the «Papieri» site are also possible.

The Board of Directors intends to make the Cham Group share an attractive dividend-bearing security for the long-term. A base dividend of at least CHF 6.00 per share will be proposed to the General Meeting of Shareholders as of the financial year 2017. The distribution is tax-free from capital reserves. As soon as the «Papieri» site yields regular income, which is likely to be the case from 2022 onwards, the dividend will be based on the actual profit generated.

For information, please contact
Media and IR office Cham Paper Group Holding AG
Edwin van der Geest
E-Mail: media@cham-group.com or investor@cham-group.com
Phone +41 43 268 32 32 / +41 79 330 55 22
Valor / ISIN / Ticker: registered shares Cham Paper Group Holding AG 193 185 / CH0001931853 / CPGN

Cham Paper Group
The Cham Paper Group is a leading manufacturer of coated speciality papers. Surface finishing lends papers properties that generate value added for its customers. The company, which was founded in 1657, has three sites, one in Switzerland (Cham) and two in Italy (Carmignano and Condino), and a global sales network.
The decision to focus on development and sales and discontinue paper manufacturing in Switzerland has made way for a new project on the factory site in the centre of Cham. The Cham Paper Group is developing an eleven-hectare quarter there called the Papieri site.
The Cham Paper Group (stock exchange symbol: CPGN) is listed on Switzerland's SIX Swiss Exchange.

Disclaimer
This communication may contain statements about the future that use words such as, for example, "believe", "assume", "expect" and other similar expressions. Such statements about the future are subject to risks, uncertainties, and other factors, which can cause the true results of the company to differ significantly from that which is expressly or implicitly assumed in these statements. In view of these uncertainties, the reader should not depend on this type of statement about the future. The company gives no undertaking whatever to update such statements regarding the future, or to adapt them to future events or developments.

This press release is issued in English and German. The German version is binding.