Neo Industrial Oyj - Company Announcement

NEO INDUSTRIAL PLC’S BOARD OF DIRECTORS HAS SIGNED THE DEMERGER PLAN

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR
INTO THE UNITED STATES, CANADA, AUSTRALIA, HONG KONG, SOUTH AFRICA OR JAPAN OR
ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL. 

NEO INDUSTRIAL PLC     STOCK EXCHANGE RELEASE      16 August 2012 at 1.40 pm

Neo Industrial Plc's (“Neo Industrial”) Board of Directors has signed the
demerger plan on 16 August 2012. The purpose of the demerger is to carry out
the separation of Neo Industrial Group's businesses so that after the entry
into force of the demerger, the fibres business will be operated in a newly
established public company, Avilon Plc, and its Group. The cable business will
remain in the demerging company, Neo Industrial, and its Group. Furthermore,
shares in Finndomo Ltd will remain in the demerging company. The demerger will
have no impact on the cable business and the single family housing business. It
is intended that Avilon Ltd's trade name will be changed into Avilon Fibres Ltd
in connection with the entry into force of the demerger. 

Neo Industrial's Board of Directors believes that the demerger will clarify the
business structures and the price formation of the securities issued by both
the demerging and the recipient company, enhance operative transparency and,
thus, contribute to the value appreciation of the shareholders' shares in the
long term.  Furthermore, the Board of Directors believes that the demerger will
improve the possibilities to utilize the licences related to the fibres
business and other intellectual property rights on a commercial basis and to
increase the sales of special fibres. The restructuring program of the existing
Avilon Ltd was approved on 28 June 2012. 

The Board of Directors proposes that the shareholders of the demerging company
will receive as demerger consideration one (1) class A share of the recipient
company for each class A share of the demerging company and one (1) class B
share of the recipient company for each class B share of the demerging company.
No demerger consideration will be given based on class B treasury shares held
by the demerging company. 

The demerger plan enclosed in its entirety to this release includes the Board
of Director's proposals to the extraordinary general meeting to be convened
towards the end of 2012. The proposals concern e.g. following matters: 

- Articles of Association of the demerging company, proposals on the Board
members and the Auditor and share capitals; 

- the demerger consideration to Neo Industrial's shareholders and the demerger
date; and 

- the distribution of the assets and liabilities of the demerging company to
the recipient company. 

Avilon Plc will apply for the listing of its class B shares on the stock
exchange list maintained by Nasdaq OMX Helsinki Ltd or, alternatively, on
another market place after the prerequisites of listing have been met after the
demerger. The listing on the exchange list requires e.g. strengthening of the
working capital structure of the new Avilon Group to be established in the
demerger. 

More detailed information on the demerger will be included in the demerger
prospectus to be published in November 2012, as estimated. 

Neo Industrial Plc

Markku E. Rentto
Managing Director

For further information, please contact:
Managing Director Markku E. Rentto, Neo Industrial, tel. +358 20 720 9191

www.neoindustrial.fi

Neo Industrial's strategy is to invest mainly in industrial companies with 
similar synergic benefits. The aim of investments is with active ownership to
develop the purchased companies and establish additional value. Returns are
sought through both dividend flow and an increase in value. Neo Industrial's
class B shares are listed on the NASDAQ OMX Helsinki Stock Exchange. Neo
Industrial's business segments are Cable and Viscose Fibers.

Attachments:

Encl_1_2.pdf

Demerger plan.pdf