Norwegian Finans Holding ASA: Norwegian Finans Holding secures European expansion through new agreements

Norwegian Finans Holding ASA: Norwegian Finans Holding secures European expansion through new agreements

Reference is made to the stock exchange release from Norwegian Finans Holding ASA ("NOFI") dated 7 December 2018. Today, NOFI has in agreement with Norwegian Air Shuttle ASA ("NAS") and HBK Holding AS agreed to purchase all the shares in the Irish company Lilienthal Finance Ltd ("Lilienthal" and the "Transaction Agreement"). Lilienthal was established in 2018 and has based on agreement with NAS dated 7 December 2018 (the "Lilienthal Agreement") exclusive right to operate bank activity in Europe except for the Nordic countries based on the same model as Bank Norwegian AS ("Bank Norwegian") has in the Nordic region. Closing of the purchase of the shares in Lilienthal is expected to take place without delay. Lilienthal, which will be a wholly owned subsidiary of NOFI, has simultaneously entered into an amendment agreement to the Lilienthal Agreement where the commercial conditions connected to Lilienthal's bank activity in Europa except the Nordic region have been finally determined (the "Amendment").

- The new agreements secure NOFI full control and management of the expansion in Europe. Today, more than 50 per cent of our business is in EU countries. The goal for the next years is that the larger part of our growth comes from new markets in Europe, while we simultaneously will continue to strengthen our position in the Nordic region, says CEO in NOFI, Tine Wollebekk.

Lilienthal will apply for a banking license in Ireland. Establishment in an EU country will be positive with respect to giving NOFI and Bank Norwegian a more efficient access to the markets in Europe ex. the Nordic region. The new agreements will, thus, give NOFI and Bank Norwegian the possibility to expand their business concept with a fully digitalized and effective bank to the whole of Europe.

- We will continue the good cooperation with NAS and the reward program Norwegian Reward on marketing and sale, while we will establish the Nordic banking business as an integral part of the expanded program in Europe. We believe that the cooperation with Norwegian Reward in Europe ex. the Nordic region will be as successful as it has been in the Nordic region, where the bank has close to 1.6 million customers, high profitability and low losses, says Wollebekk.

According to the Transaction Agreement, NOFI shall pay a total cash consideration of NOK 40 million for 100 per cent of the shares in Lilienthal, of which NOK 28 million will be paid to NAS. The main elements in the consideration to NAS in the Lilienthal Agreement and the Amendment are an annual cash license fee of NOK 30 million for the right to use the name «Norwegian» and the airline's logo in Europe ex. the Nordic region. The license fee for the first five years, in total NOK 150 million in cash, shall be paid as a one-time fee by 1 June 2019. NOFI shall also transfer to NAS, as a one-time fee and within reasonable time, shares in NOFI at a market value of NOK 150 million. The license fee is subject to renegotiation after ten years, corresponding to what applies in the license for the Nordic countries.

- The new agreements strengthen Norwegian's shareholders' opportunity to take part in NOFI's international expansion. The cooperation between the airline and the bank has been a great success in the Nordic region through Norwegian Reward, and I have great faith that the bank will also succeed well in new markets in Europe where the airline has already been established, says NAS' CFO Geir Karlsen.

Questions regarding the new agreements may be presented connected to the company's presentation for Q1 2019, on Friday 3 May 2019, from 8:30.

This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act