Benefon Oyj - Company Announcement

DECISION ON THE EQUITY FUNDING AND RELATED DIRECTED SHARE ISSUE OF BENEFON OYJ

Benefon Oyj announced today that it is negotiating with certain investors of new
financing to be provided for the purpose of securing the working capital of the 
company and supporting its business plan. The Board has approved the terms for  
the financing as follows. The financing consists of new investment series shares
of the company and convertible bond loan entitling to subscription of new       
investment series shares and it may amount up to EUR 9,000,000. The agreed      
financing is conditional for restructuring the ownership of the company by      
issuing new investment series shares to GeoHolding B.V. without charge. The     
restructuring shall be performed in order to correct the valuation of the       
acquisition of GeoSolutions B.V. executed on April 27th 2007 and defined by the 
company which has proven to be false.                                           

At first the Board has decided to raise a maximum of EUR 4,950,000 by virtue of 
authorization granted by the Annual General Meeting of April 16th 2007, by      
offering new investment series shares and convertible bond loan to certain      
investors. In order to execute rest of the above mentioned financing arrangement
the Board has decided to call the Extraordinary General Meeting of the          
shareholders to be convened. The call to the Extraordinary General Meeting shall
be released separately on Thursday August 23rd, 2007 at the latest.             

Consequently the rest of the financing, totalling a maximum of EUR 4,050,000    
shall be raised after the upcoming Extraordinary General Meeting has decided to 
grant a new authorization to the Board. In addition the directed share issue    
without charge to GeoHolding B.V. shall be arranged afterwards.                 

Accordingly the Board has decided to issue new investment series shares and     
convertible bond loan for a total maximum amount of EUR 4,950,000 (the          
“Offering”) to be directed to certain institutional and qualified investors not 
exceeding 100 and accepted by the Board. The maximum number of new investment   
series shares offered for subscription is 22,000,000 and subscription price is  
EUR 0.18 per share. Each subscribed share shall entitle the investor to         
subscribe for four (4) convertible notes with a principal value of 0.01125 each.
The maximum principal amount of convertible bond loan, which includes a specific
right to use the loan to set off subscription price of shares as according to   
Chapter 10, Clause 1 of the Finnish Companies Act, is EUR 990,000 and each EUR  
0.01125 of the loan principal entitles its holder to subscribe for one new      
investment series share. The maximum number of new investment series shares that
can be subscribed for by virtue of the loan is 88,000,000.                      

Of the share subscription price EUR 0.01 is booked to share capital and the     
remainder in invested unrestricted equity fund. As a result of the share issue  
company's share capital may increase by a maximum of EUR 220,000.00 and as a    
result of convertible bond loan by a maximum of EUR 880,000.00.                 

Subscription period for the Offering begins on August 21st, 2007 and ends on    
September 10th, 2007. The Board has a right to continue the subscription period.
The new investment series shares offered for subscription in the Offering       
represent at maximum 6.50 % and the convertible bond loan at maximum 26.01 % of 
the company's registered shares prior the Offering. The new shares subscribed   
for are equivalent of their right with company's existing investment series     
shares and will be applied for listing as soon as the respective share          
subscriptions have been made and shares registered in trade register. Listing of
the shares subscribed for in the Offering shall take place as soon as possible  
in practice.                                                                    


Condition for the aforementioned financing                                      

The investors have set the following additional conditions for the entire equity
financing:                                                                      

The company shall issue new investment series shares and option rights to       
GeoHolding B.V without charge in order to restructure the acquisition of        
GeoSolutions B.V. executed on April 27th 2007 and to increase the fully diluted 
ownership of GeoHolding B.V. up to 30 % as agreed with the investors.           
Accordingly the company has agreed to issue a maximum of 221,007,003 new        
investment series shares and maximum of 35,305,555 new option rights to         
GeoHolding without charge in pursuance of executing the rest of the financing.  

Of the issued shares 103,333,333 shares and all new option rights are directed  
in order to correct the misevaluation of the purchase price defined by the      
company. The corrected valuation is based on the valuation agreed with the      
investors and shall balance the prior acquisition price to correspond the       
correct price. At the same the terms of option rights 2007-1, directed to the   
key resources of GeoSolutions B.V., shall be amended such that the share        
subscription price is decreased to correspond the agreed price of EUR 0,045 per 
share.                                                                          

The Board has approved the above mentioned arrangement which is conditional for 
the confirmation and authorization of the upcoming Extraordinary General        
Meeting.                                                                        


August 21st, 2007                                                               

BENEFON OYJ                                                                     

Tomi Raita                                                                      
CEO                                                                             

For more information, please contact:                                           
Tomi Raita, CEO, tel. +358-2-77400                                              
www.benefon.com                                                                 

Distribution:                                                                   
Helsinki Exchanges                                                              
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