Preliminary Results for Powerflute's Rights Issue

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL

THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES INTHE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND DOES NOT CONSTITUTE A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT. COPIES OF THE COMPANY'S PROSPECTUS DATED 20 OCTOBER 2010 ARE AVAILABLE FROM POWERFLUTE'S REGISTERED OFFICE AND WEBSITE: www.powerflute.com

TERMS USED IN THIS ANNOUNCEMENT HAVE THE SAME MEANING AS THOSE DEFINED IN THE COMPANY'S PROSPECTUS.

POWERFLUTE OYJ

("Powerflute" or the "Company")

18 November 2010

PRELIMINARY RESULTS FOR POWERFLUTE'S RIGHTS ISSUE

PowerfluteOyj is pleased to announce the preliminary results of its 3 for 4 Rights Issue following the end of the subscription period on 10 November on AIM and on 16 November 2010 on First North.

A total of 108,613,630 Rights Issue Shares were offered for subscription in accordance with shareholders' pre-emptive subscription rights to raise proceeds of EUR 14.9 million. In aggregate, the Company received valid acceptances in respect of 85,876,296 Rights Issue Shares, representing approximately 79.07% of the total number of Rights Issue Shares offered to Qualifying Shareholders pursuant to the Rights Issue.

Trading in Interim Shares representing the Rights Issue Shares for which subscriptions have been received commenced on First North and on AIM on 17 November 2010.

Rights Issue Shares not subscribed for by existing shareholders will be taken up based on subscription commitments received by the Company. In accordance with its obligations as Underwriter in respect of the Rights Issue as set out in Part II of the prospectus dated 20 October 2010, Collins Stewart Europe Limited has procured subscribers for 8,538,629 New Shares not validly taken up in the Rights Issue and it is expected that the remaining 14,198,705 New Shares will be allocated to Bacchantes Limited in accordance with its obligations under the Bacchantes Agreement.

The Company also intends to issue 36,386,370 New Shares through the placing to certain institutional shareholders to raise further proceeds of EUR 5.0 million. The Company has received subscription commitments for the full amount of the Placing. The Placing Shares will be issued at the same time as the New Shares are issued pursuant tothe Rights Issue. The final outcome of the Rights Issue and Placing will be announced on or about 22 November 2010.

All New Shares subscribed for in the Rights Issue and Placing are expected to be registered with the Finnish Trade register on or about 23 November 2010 after which the Interim Shares will automatically become New Shares. The New Shares will be admitted to trading on AIM and First North on or about 24 November 2010. It is expected that the New Shares in uncertificated form will be credited to CREST accounts by no later than 11.00 am on 24 November 2010.

Following completion of the Placing and the Rights Issue, it is expected that the Company will have 289,818,174 Ordinary Shares in issue, to which an equal number of voting rights are attached. None of these Ordinary Shares is held in treasury. This figure may be used by shareholders as the denominator for the calculations by which they will determine whether they are required to notify their holdings, or a change to their holdings, of voting rights attaching to Ordinary Shares pursuant to article 13 of the Company's articles of association.

www.powerflute.com

For further information, please contact:

General

This Announcement is not for release, publication or distribution in or into Australia, Canada, Japan or the United States or any other jurisdiction in which the same would be unlawful.

This Announcement does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any securities in Australia, Canada, Japan or the United States or any other jurisdiction in which the same would be unlawful and should not be relied upon in connection with any decision to acquire any securities in the capital of the Company.

This Announcement is for information only and does not constitute an offer or invitation to acquire or dispose of any securities or investment advice in any jurisdiction.

This Announcement is an advertisement and not a prospectus and investors should not subscribe for or purchase shares (or depositary interests representing such shares) in the Company in connection with the proposed Rights Issue or Placing except on the basis of information contained in the Prospectus published by the Company in connection with the proposed Rights Issue and Placing. Copies of the Prospectus are available from the Company's website (www.powerflute.com).

This Announcement has been issued by and is the sole responsibility of the Company. No representation or warranty express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Collins Stewart or by any of its affiliates or agents as to, or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

Collins Stewart, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as nominated adviser, broker and underwriter exclusively for Powerflute Oyj and for no-one else in connection with the Rights Issue and Placing and will not regard any other person (whether or not a recipient of the Prospectus) as a client in relation to the Rights Issue and Placing and will not be responsible to anyone other than Powerflute Oyj for providing the protections afforded to its clients, nor for providing advice in connection with the Rights Issue and Placing or any other matter referred to herein.

About Powerflute

Powerflute Oyj ("the Company" or "Powerflute") is a packaging group with established positions in Nordic semi-chemical fluting and coated woodfree papers.

Through its subsidiary Savon Sellu Oy, the Group operates a paper mill in Kuopio, Finland which produces a specialised form of semi-chemical fluting made from locally sourced birch. Corrugated boxes manufactured using Nordic semi-chemical fluting demonstrate strength and moisture resistance and are used for transportation of fruit and vegetables, high-value industrial goods such as electrical appliances and automotive components. The Kuopio mill has the capacity to produce up to 300,000 tonnes per annum and is one of three suppliers of Nordic semi-chemical fluting in Europe.

Through its subsidiary Papierfabrik Scheufelen, the Group operates a paper mill in Lenningen, Germany which produces a range of coated woodfree papers from mixed hardwood and softwood pulps. Coated woodfree papers are used in the production of printed promotional material such as brochures, leaflets and other point of sale materials for producers and distributors of premium branded goods. The Lenningen mill has the capacity to produce up to 300,000 tonnes per annum and supplies the majority of its products into the European market.