Hafslund ASA ("Hafslund") has completed a secondary placing of 35 million ordinary shares in REC, representing in aggregate approximately 7.1% per cent of the issued share capital of REC (the "Placing"), at a price of NOK 138 per share.

 

ABG Sundal Collier Norge ASA ("ABG Sundal Collier") and UBS Investment Bank ("UBS") (together the "Managers") acted as Managers and Joint Bookrunners for the Placing.

 

Supported by the company's dividend policy and strong financial position, Hafslund will propose to the shareholders meeting in May 2007 a special dividend of NOK 15 per share, equivalent to NOK 2.9 billion. The remaining proceeds will be retained in the company for funding of growth initiatives, among others, the acquisition and development of Viken Fjernvarme (district heating). The special dividend comes in addition to the already proposed dividend of NOK 2.75 per share.

 

Following completion of the Placing, Hafslund holds, in aggregate, 70.4 million shares in REC, which corresponds to 14.3% of REC's issued share capital.

 

Hafslund has undertaken not to sell or otherwise dispose of any shares in REC for a period of 90 days from the completion of the Placing without the prior written consent of the Managers.

 

Hafslund ASA

Oslo, 22 March 2007

 

Enquiries:

 

Hafslund

 

Christian Berg, CEO Tel: +47 91 74 69 10

 

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MEMBERS OF THE GENERAL PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT AND ANY OFFER OF SECURITIES TO WHICH IT RELATES ARE ONLY ADDRESSED TO AND DIRECTED AT PERSONS WHO ARE (1) QUALIFIED INVESTORS WITHIN THE MEANING OF DIRECTIVE 2003/71/EC AND ANY RELEVANT IMPLEMENTING MEASURES (THE "PROSPECTUS DIRECTIVE") AND (2) WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS WHO FALL WITHIN ARTICLE 19(1) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER") OR ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THE INFORMATION REGARDING THE PLACING SET OUT IN THIS ANNOUNCEMENT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.

 

This announcement has been issued by Hafslund and is the sole responsibility of Hafslund. This announcement is for information purposes only and does not constitute an offer or an invitation to acquire or dispose of any securities of REC in the United States, Canada, Australia or Japan or in any other jurisdiction in which such an offer of solicitation is unlawful. The Placing Shares have not been, and will not be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration. There will be no public offering of securities in the United States.

 

Any investment decision to buy securities in the Placing must be made solely on the basis of publicly available information which has not been independently verified by the Seller or the Managers.

 

Neither this announcement nor any copy of it may be taken, transmitted or distributed, directly or indirectly in or into the United States, Canada, Australia or Japan. Any failure to comply with this restriction may constitute a violation of United States, Canadian, Australian or Japanese securities laws.

The distribution of this announcement and the offering or sale of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by Hafslund, the Managers, or any of their respective affiliates, or any other person that would permit an offer of the Placing Shares or possession or distribution of this announcement or any other offering or publicity material relating to the Placing Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by Hafslund and the Managers to inform themselves about and to observe any such restrictions.

 

The Managers are acting for Hafslund only in connection with the Placing, and no one else, and will not be responsible to anyone other than Hafslund for providing the protections offered to clients of the Managers nor for providing advice in relation to the Placing.

 

ABG Sundal Collier is authorised and regulated by Kredittilsynet.

 

UBS is authorised and regulated by the UK Financial Services Authority.