Termination of discussions

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21 December 2015

Powerflute Oyj

Termination of discussions

On 10 December 2015 Powerflute Oyj ("Powerflute" or the "Company") announced that it had received a preliminary proposal from Madison Dearborn Partners, LLC ("Madison Dearborn") regarding a possible offer for the entire issued and to be issued share capital of the Company (the "Proposal").

Following evaluation of the Proposal by the independent members of the Board of Directors of Powerflute and consultations with certain major shareholders of Powerflute, the Board of Powerflute has terminated discussions with Madison Dearborn.

This announcement is being made by Powerflute with the prior knowledge of Madison Dearborn.

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About Powerflute

Powerflute is a paper and packaging group quoted on the AIM market of the London Stock Exchange (Ticker: POWR) which seeks to acquire businesses with strong fundamentals whose performance can be improved through a combination of management focus and targeted investment.

The Powerflute group currently has two main activities; Packaging Papers which trades under the name Powerflute and operates a paper mill in Kuopio, Finland producing a specialised form of Nordic semi-chemical fluting used in the manufacture of high-performance corrugated board; and Coreboard and Cores, which trades under the name Corenso and is a leading international manufacturer of high performance coreboard and cores, with coreboard mills in the United States and Europe and a network of core producing facilities in Europe, North America and China.

Nordic semi-chemical fluting is made from locally sourced birch and boxes manufactured using it demonstrate superior 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 is one of only three suppliers of Nordic semi-chemical fluting in Europe.

Cores and coreboard are manufactured from recycled paper and are used for applications in paper, packaging, textiles, steel, aluminium and many other industries. Coreboard and cores produced by Corenso demonstrate superior strength and rigidity and are suitable for use in the most demanding applications.

For further information, please visit www.powerflute.com.

N M Rothschild & Sons Limited ("Rothschild"), which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting exclusively for Powerflute and no one else in connection with the Proposal and will not be responsible to anyone other than Powerflute for providing the protections afforded to clients of Rothschild or for providing advice in connection with the Proposal or any matter referred to herein.

Numis Securities Limited ("Numis Securities"), which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting exclusively for Powerflute and no one else in connection with the Proposal and will not be responsible to anyone other than Powerflute for providing the protections afforded to clients of Numis Securities or for providing advice in connection with the Proposal or any matter referred to herein.