GN Store Nord A/S
Company Announcement

TPSA-settlement ends 10 years of litigation – GN to receive DKK 3.1 billion

Copenhagen, 2012-01-12 23:15 CET -- DPTG and TPSA have today reached an agreement to settle the dispute regarding the traffic volumes carried over the NSL fiber optical telecommunications system in Poland. With the settlement, TPSA agrees to pay a total of EUR 550 million to DPTG as full and final payment.

GN is entitled to receive 75% of the amount or around DKK 3,060 million. The amount will be transferred to DPTG in two payments. EUR 275 million will be transferred on January 13, 2012, and the remaining EUR 275 million will be transferred to an escrow account with Nordea on January 13, 2012 and will be released to DPTG as soon as DPTG has initiated termination of ongoing enforcement proceedings.

The agreement covers both Phase 1 and 2 as well as accrued interest. As GN has previously recognized the award for Phase 1 as well as accrued interest in the financial statements, the net impact of the settlement before tax in the financial statements for Q4 2011 will be around DKK 0.7 billion.

The settlement amount is subject to the Danish corporate tax rate of 25%. As previously communicated in connection with the award for Phase 1 in September 2010, GN has certain tax losses carried forward and the cash effect for GN is thus expected to be around DKK 2.5 billion net of tax and related expenses, which have not yet been paid.

GN has previously communicated that the company intended to initiate a DKK 600 million share buyback program upon collection of the Phase 1 award. Based on this settlement, which also includes Phase 2, GN now intends to buy back shares amounting to DKK 1.3 billion. Acting under the current share buyback authorization, the program will be initiated upon collection of the first payment. Contingent upon granted authorization at the Annual General Meeting in March 2012, the share buyback program will continue thereafter.

The part of the settlement not used for share buybacks, will initially be used to repay the current DKK 1.2 billion debt of the company. GN’s capital structure policy (net debt up to a maximum of two times EBITDA) remains unchanged – GN’s long term policy continues to be to distribute excess cash to shareholders.

GN Store Nord Chairman Per Wold-Olsen says: “We are truly pleased that this protracted dispute has come to an end. We have worked diligently in the interest of the shareholders and the settlement marks an important milestone for GN.”

As a consequence, GN’s full year 2011 guidance for “Other” and “Amortization, finance etc.” is adjusted as shown in the table below. The full year guidance for GN ReSound and GN Netcom remains unchanged:

GN will host a teleconference and webcast on January 13, at 9.00 a.m. CET. Please see call in details on www.gn.com.

For further information, please contact:

Mikkel Danvold VP,
Investor Relations

GN Store Nord A/S
Tel: +45 45 75 02 71