Weifa ASA : Weifa proposes separation of Consumer Health and B2B

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART DIRECTLY OR INDIRECTLY, IN AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES

Oslo, 13 March 2015

Weifa ASA (the "Company", ticker "WEIFA"), announces today that the Board of Directors will propose to separate the Company`s consumer health and business-to-business ("B2B") operations through a sale of its B2B business and tablet production to Vistin Pharma, a newly established subsidiary of Weifa, which will seek listing on Oslo Axess.

A separation will allow the two companies to pursue their own strategic agenda, and represents a logical step in creating two companies with clear investment stories:

• Consumer Health - a pure consumer brand player with leading category positions

• Vistin Pharma - a strong pharmaceutical investment case with key positions and growth potential in the international metformin and opioids market, and a strong fundament to create a highly efficient Contract Management Organisation (CMO).

Highlights:

• Weifa is contemplating a sale of its B2B and tablet production (CMO) operations to the newly established company, Vistin Pharma

• Vistin Pharma will conduct an equity issue of approx. NOK 170 million to finance the B2B acquisition and secure working capital and funds for growth

• The equity issue is fully guaranteed by primarily large existing shareholders of Weifa

• All Weifa shareholders will receive tradable subscription rights in Vistin Pharma

The board of Weifa considers that the proposed separation is in the best interests of both Weifa and Vistin Pharma, and will result in a stronger future for both the current consumer health and API activities of the Company. In particular, the board of Weifa considers that the profile and potential risks and rewards of Vistin Pharma, as an API company, will be better understood as a standalone listed business. Weifa will continue its focus as a consumer health company.

The current CEO of Weifa, Kjell-Erik Nordby, will be appointed CEO of Vistin Pharma.

• The board of Weifa considers that the separation is in the best interests of Weifa shareholders, and the board unanimously recommends shareholders to vote in favour of the separation at the general meeting to be held in mid-April, comments chairman Glen Ole Rødland of Weifa.
  

• I look forward to collaborating with the board to further build upon the strong foundation set by Weifa. I am energized by the opportunity to continue leveraging the unique API facilities in Kragerø to expand the metformin, the opoids and the CMO businesses, comments CEO Kjell-Erik Nordby of Weifa.

The transaction:
The Board of Directors of Weifa has decided to call for an extraordinary general meeting to propose a sale of the Company`s B2B and tablet production operations to a separate subsidiary of the Company (the "Business Sale"). The Company is in the process of establishing a new Norwegian public limited liability company for the purpose of being the holding company for the subsidiary, which will apply for listing of its shares on Oslo Axess. The name of the new holding company will be Vistin Pharma ASA ("Vistin Pharma"). To finance the acquisition of the Company`s B2B operations and secure working capital and funds for future growth initiatives, Vistin Pharma will conduct an equity issue of approximately NOK 170 million (the "Equity Issue"). Approximately NOK 120 million of the proceeds from the Equity Issue will be paid to Weifa as consideration for the B2B business. Approximately NOK 50 million will remain in Vistin Pharma following the transaction. The Equity Issue is fully guaranteed primarily by large existing shareholders of Weifa. The underwriters will receive a guarantee commission of 2% of their guaranteed amount, subject to completion of the Equity Issue.

The proposed Business Sale will, inter alia, be conditional upon approval by an extraordinary general meeting of Weifa expected to be held in mid-April (the "EGM"), the preparation and signing of a sale and purchase agreement and a contract manufacturing agreement, and that the Board of Directors of Oslo Børs approves the listing of the shares issued by Vistin Pharma on Oslo Axess.

A prospectus for Vistin Pharma will be published prior to the subscription period for the Equity Issue, expected to commence in the middle of May, and an information memorandum for Weifa will be published pursuant to continuing obligations of stock exchange listed companies.

Vistin Pharma ASA:
Vistin Pharma will be a leading international producer of active pharmaceutical ingredients ("API") for diabetes medicine (metformin) and opiates for use in pain relief and cough medicine. In addition, the company will enter into a contract manufacturer agreement (CMO) with Weifa for the production of Weifa`s key pain relief brands. The CMO agreement with Weifa will have a duration of five years with option for extension. Vistin Pharma will further continue to develop its CMO business through its know-how, competencies and production capacity to attract new CMO agreements with external parties.

CEO Kjell-Erik Nordby will lead Weifa until Vistin Pharma is listed on Oslo Axess. From the same day, he will take over as CEO of Vistin Pharma.

Ole Enger will be the chairman in Vistin Pharma. Mr Enger is one of the most experienced professionals in the Norwegian manufacturing industry, and his previous experience includes positions as the CEO of both Elkem and REC.

Vistin Pharma will employ approximately 140 highly qualified people.

Vistin Pharma will at the time of listing have a solid capital structure with NOK 50 million in cash and no debt.

In connection with the underwriting of the Equity Issue, the Guarantors have received certain information regarding Vistin Pharma. In order to ensure equal information in the market, the Company hereby discloses the following information regarding full-year 2015 estimates for Vistin Pharma on a stand-alone basis:

• Revenue: NOK 387 million

• EBITDA: NOK 31 million

Note that these figures are management estimates and have not been and will not be subject to audit or review.

For further information please refer to the launch presentation attached.

Weifa ASA:
Weifa will continue to strengthen its category leading positions within consumer health ("over the counter" or "OTC"). Weifa`s product portfolio includes well-known Norwegian brands such as Paracet, Ibux and Paralgin Forte.

Weifa will continue to pursue its strategy of being a category captain in pain relief and among the top three in the cough and cold category. Following the separation, Weifa will be well positioned to develop its position further and aim to be a pan-Nordic consumer health company.

VP Consumer Health, Kathrine Gamborg Andreassen, will take over as the CEO of Weifa, while Glen Ole Rødland will continue as chairman of the board.

The number of employees in Weifa following the Business Sale will be approximately 30.

Equity Issue:
The Equity Issue will be completed in two tranches, i) a ~NOK 155 million tranche directed towards the existing shareholders of Weifa (the "Rights Offering"), and ii) a NOK 15 million tranche offered to employees and board members in Vistin Pharma (the "Employee Offering").

The Rights Offering will be directed towards the shareholders of Weifa, as per a date to be determined (the "Ex-Date"), such date to be following the EGM of Weifa to be held to approve the sale of B2B. The shareholders of Weifa will receive subscription rights in relation to their shareholding in Weifa as of the Ex-Date. One subscription right will give the right to subscribe for and be allocated one new share. The subscription rights will be tradable and oversubscription will be allowed.

The Employee Offering will, in order to align the interest of employees and board with the interests of the shareholders, be directed towards the employees and board members of Vistin Pharma, at the same issue price as in the Rights Offering.

Indicative timeline and key events:

• Extraordinary General Meeting Weifa: Mid-April

• Last day of trading in the Weifa share inclusive the right to receive subscription rights in Vistin Pharma: Mid May

• Subscription period: Latter part of May

• Transferal of B2B from Weifa to Vistin Pharma: Early June

• First day of trading in the Vistin Pharma shares on Oslo Axess: Early June

The indicative timeline is subject to adjustments.

Actions to be taken by Weifa shareholders:
Invitations to the EGM will be sent to all shareholders in due course. Shareholders as of the Ex-Date will also receive a letter containing information about the Rights Offering, including the number of subscription rights granted to each shareholder. The shareholders do not need to act prior to the subscription period for the Rights Offering which is anticipated to take place in the latter half of May, in order to subscribe for new shares.

Carnegie acts as sole financial advisor in connection with the Business Sale and the Equity Issue.

Contacts:

Glen Rødland
Chairman
+47 909 41 662

Kjell-Erik Nordby
CEO
+47 913 64 280
kjell-erik.nordby@weifa.no

Gunnar Manum
CFO
+47 951 79 190
gunnar.manum@weifa.no

About Weifa ASA:
Weifa ASA has, through the acquisition of Weifa AS in August 2014, become Norway`s leading fully-integrated pharmaceutical company and a major supplier of active ingredients to the international pharmaceutical industry. Weifa currently has approx. 175 employees, is headquartered in Oslo and has two manufacturing plants in Kragerø in southern Norway. Weifa`s Consumer Health business holds well-known Norwegian brands such as Paracet, Ibux and Paralgin Forte.

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

Important information:

The release is not for publication or distribution, in whole or in part directly or indirectly, in or into Australia, Canada, Japan or the United States (including its territories and possessions, any state of the United States and the District of Columbia).

This release is an announcement issued pursuant to legal information obligations, and is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. It is issued for information purposes only, and does not constitute or form part of any offer or solicitation to purchase or subscribe for securities, in the United States or in any other jurisdiction. The securities mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "Securities Act"). The securities may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act. The Company does not intend to register any portion of the offering of the securities in the United States or to conduct a public offering of the securities in the United States. Copies of this announcement are not being made and may not be distributed or sent into Australia, Canada, Japan or the United States. The issue, exercise, purchase or sale of subscription rights and the subscription or purchase of shares in the Company are subject to specific legal or regulatory restrictions in certain jurisdictions. Neither the Company nor the Manager assumes any responsibility in the event there is a violation by any person of such restrictions.

The distribution of this release may in certain jurisdictions be restricted by law. Persons into whose possession this release comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. Carnegie is acting for the Company and no one else in connection with the Equity Issue and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients or for providing advice in relation to the Equity Issue and/or any other matter referred to in this release.

Forward-looking statements:
This release and any materials distributed in connection with this release may contain certain forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they reflect the Company`s current expectations and assumptions as to future events and circumstances that may not prove accurate. A number of material factors could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.

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Launch presentation Vistin Pharma

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This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.

The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Weifa ASA via GlobeNewswire
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