Elkem

Share Issue/Capital Change • Feb 26, 2018

ELKEM INTENDS TO LAUNCH INITIAL PUBLIC OFFERING AND LISTING ON OSLO BØRS

ELKEM INTENDS TO LAUNCH INITIAL PUBLIC OFFERING AND LISTING ON OSLO BØRS

NOT FOR DISTRIBUTION OR RELEASE, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES OF AMERICA AND THE DISTRICT OF COLUMBIA) (THE "UNITED STATES"), AUSTRALIA, CANADA OR JAPAN, OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL.

ELKEM INTENDS TO LAUNCH INITIAL PUBLIC OFFERING AND LISTING ON OSLO BØRS

Oslo, 26 February 2018: Elkem ASA ("Elkem" or the "Company") today announces its intention to launch an initial public offering of its shares and to apply for a listing on Oslo Børs (the "IPO").

Please see attachment at www.newsweb.no for full 'intention to float' release.

Elkem highlights

(i) Elkem is a global leader in silicon-based advanced materials, with a history of more than 110 years of technology-driven growth.

(ii) Elkem is a fully integrated supplier with operations throughout the silicon value chain from quartz to downstream silicone specialties, as well as speciality ferrosilicon alloys and carbon materials.

(iii) Over the last years Elkem has developed significantly, becoming more specialised and transitioning into a predominantly specialty chemicals company with the majority of its revenues from the silicones value chain.

(iv) Elkem's global footprint, with operations and sales offices in 28 countries worldwide, ensures sustainable competitive strengths such as economies of scale, production flexibility, cost optimisation and proximity to customers in important markets.

(v) In connection with the planned IPO, Elkem will acquire 100% of the shares in Jiangxi Bluestar Xinghuo Organic Silicone Co. Ltd. ("Xinghuo Silicones") and 100% of the shares in Bluestar Silicon Material Co. Ltd. ("Yongdeng Silicon Materials") (together the "new Chinese business").

(vi) Following this acquisition, Elkem will become a true global player with a more diversified revenue base and significant growth platform in the fast-growing Chinese market.

(vii) Elkem and the new Chinese business has approximately 6100 employees worldwide and had a combined, total operating income of NOK 21.4 billion, while Operating EBITDA amounted to NOK 3.2 billion for the year ended 31 December 2017.

(viii) Elkem is headquartered in Oslo, Norway and is currently owned by China National Bluestar.

"Over the last few years we have built on our position as one of the world leaders in environmentally responsible production of silicon-based advanced materials. We see an increasing demand for our solutions and are well positioned for further profitable growth. A listing of Elkem on Oslo Børs will enhance access to a diverse capital base and support our growth strategy", says Mr Helge Aasen, CEO of Elkem.

Bluestar intends to remain a long-term majority shareholder in Elkem following the IPO.

"Elkem has proven the ability to deliver steady, profitable growth and has a strong financial position. A public listing is considered a natural step in our ownership strategy. Bluestar plans to remain a long-term industrial owner in Elkem, and looks forward to taking part in and supporting Elkem's future growth and value creation", says Mr Michael Koenig, CEO of China National Bluestar and chairman of the board of Elkem.

Elkem has a growth strategy, targeting further expansion and development of its fully integrated silicone-based value chain.

"Xinghuo Silicones and Yongdeng Silicon Materials will complement Elkem's existing silicones business, enabling further specialisation into high value-added segments. Further, by acquiring Xinghuo Silicones and Yongdeng Silicon Materials, Elkem will gain significant upstream capacity in the fast-growing Chinese markets and thus improved supply of its full product range to specialty customers in China," says Aasen.

Elkem has a clear ambition to develop its position within silicones through the integration of Xinghuo Silicones, which is the largest silicones plant in China in terms of capacity, targeting to become one of the largest players worldwide.

As of 31 December 2017, Elkem's Silicones and Silicon Materials divisions accounted for approximately 75% of Elkem's revenues on a combined basis (i.e., including the new Chinese business). As a result of the acquisition of the new Chinese business, Elkem will gain access to a significant and well invested capacity reservoir which will ensure an attractive growth option. On a combined basis, Elkem's total revenues increased by 26% from 2016 to 2017. In the medium term, Elkem is targeting revenues to reach approximately double GDP growth and for 2018, the target is double digit revenue growth.

ABG Sundal Collier and Morgan Stanley & Co. International plc are acting as joint global coordinators and joint bookrunners and Carnegie AS, Citigroup Global Markets Limited and Nordea Bank AB (publ), (Norwegian branch), are acting as joint bookrunners, in connection with the IPO (collectively, the "Managers").

Advokatfirmaet Thommessen AS and Linklaters LLP are acting as legal counsels to Elkem and Bluestar. Advokatfirmaet Schjødt AS and Shearman & Sterling (London) LLP are acting as legal counsel to the Managers.

Please see attachment at www.newsweb.no for further information and the full release.