KLIPPAN AB – Composition proposal to KLIPPAN group creditors

In an earlier press release dated 29 August 2005, the KLIPPAN group informed about the composition proposal to be made to the creditors of KLIPPAN AB and Klippan Mölndal AB. The enclosed composition proposal differs from the previously communicated composition proposal dated 29 August 2005 in that the payment of the composition amount will be made earlier. KLIPPAN AB and Klippan Mölndal AB will pay as full compensation 37 percent of the capital amount of the claims covered by the composition. Payment of 25 percent of the capital amount will be made on 31 March 2006 on condition that the composition is approved, and payment of the remaining 12 percent of the capital amount will be made on 31 July 2007 provided that the composition is approved. Once the composition proposal of 37 percent has been approved by the District Court, KLIPPAN AB and Klippan Mölndal AB offer all creditors covered by the composition, if they so wish, to receive payment of 32 percent of the capital amount of their claims, with the entire amount being paid on 31 March 2006. Creditors who accept this offer will waive with binding effect the difference in amounts between 32 percent and 37 percent of the capital amount. The reconstructor’s report is enclosed with this press release. The composition proposal is supported by Södra Skogsägarna, ABB, Öresundskraft and several of the larger creditors. The financial information relating to the period after 30 June 2005 in this press release has not been the subject of review by the company’s auditors. The Board KLIPPAN AB For further information, please contact: Thomas Billing, MD, tel +46 (0) 435-291 01 or Guy Lofalk, attorney, tel: +46 (0) 8-22 09 00.