Statement by Oasis Management Company Ltd. on “A Better Hokuetsu”(Stock Code: 3865 JT)* Oasis launches campaign focused on improving operations and governance at papermanufacturer Hokuetsu* Oasis urges Hokuetsu to invest in biomass power plant business and reduce cross-shareholdings
More information available at www.ABetterHokuetsu.com

October 26, 2021, Tokyo and Hong Kong - Oasis Management Company Ltd. (“Oasis”) is the manager tofunds that beneficially own over 7.3% of paper manufacturer Hokuetsu Corporation (3865 JT) (“Hokuetsu”or the “Company”). Oasis has adopted the Japan FSA’s “Principles of Responsible Ownership” (a/k/a theJapan Stewardship Code) and in line with those principles, Oasis monitors and engages with its investeecompanies.
Today, Oasis announces its “A Better Hokuetsu” campaign in an effort to transform Hokuetsu to meet thechallenges of a paperless future and enhance Hokuetsu’s corporate value over the long-term to the benefitof all stakeholders.
Hokuetsu’s Challenges
Oasis is a long-term shareholder of Hokuetsu and has been engaging closely with the Company on
operational and governance improvements. As the digital world evolves, Hokuetsu’s core paper pulp
business has declined along with the rest of the paper industry -- a decline that has accelerated in the era ofCovid-19.
Hokuetsu’s CEO, Mr. Kishimoto, has led the Company for 13 years. He has been reluctant to accept thisreality and adapt the business model to survive. During his tenure, the average Hokuetsu employee’s salary
has declined by -13%. Recently, the Company has expanded into the growth areas of sanitary tissues andcontainerboards; however, this step was too little, too late.
Hokuetsu also has substantial cross-shareholdings representing nearly 75% of the Company’s market value,in direct contradiction to guidance in Japan’s Corporate Governance Code to reduce such holdings. It isclear that Hokuetsu stakeholders, including Hokuetsu employees, have suffered under Mr. Kishimoto’sleadership. Now is the time for change.

A Better Hokuetsu
We urge Hokuetsu to:••

Resolve its cross-shareholdings with Daio Paper; andInvest in the biomass power plant business.

Hokuetsu’s biomass plant business, started in 2006, represents a massive opportunity. Renewable energy,including biomass energy, will only become more important in the future as more companies and investors
focus on sustainability. With shrinking demand for printing paper, pivoting to focus on biomass power
plants as the core business and investing with the proceeds from the sale of cross-shareholdings wouldgenerate substantial corporate value for Hokuetsu into the future. We view this as the best way for theCompany to survive and succeed. If the company executes on this plan, we believe Hokuetsu’s marketvalue could quadruple to JPY534 billion.
Seth Fischer, Founder and Chief Investment Officer of Oasis, said:“Hokuetsu is massively undervalued and has a generational opportunity in the biomass power plantbusiness. After 13 years of underperformance, Hokuetsu’s stakeholders and employees deserve leadershipthat is dedicated to bold action and change.”
Full details of Oasis’s proposals are available at www.abetterhokuetsu.com. We urge Hokuetsu to swiftly
execute on these proposals. This is an important mission in which all stakeholders should be engaged. We
all want the same thing: a better Hokuetsu.
We welcome all stakeholders to contact Oasis at info@abetterhokuetsu.com to help build A BetterHokuetsu.
***Oasis Management Company Ltd. manages private investment funds focused on opportunities in a wide arrayof asset classes across countries and sectors. Oasis was founded in 2002 by Seth H. Fischer, who leads the firm
as its Chief Investment Officer. More information about Oasis is available at https://oasiscm.com. Oasis has
adopted the Japan FSA’s “Principles of Responsible Institutional Investors” (a/k/a Japan Stewardship Code)and in line with those principles, Oasis monitors and engages with our investee companies.
The information contained in this press release (referred to as the "Document") is an information resource forshareholders in Hokuetsu offered by Oasis, the investment manager to funds that are shareholders of Hokuetsu(the "Oasis Funds"). The Document is not intended to solicit or seek shareholders' agreements to jointly
exercise any voting rights with Oasis. Shareholders that have an agreement to jointly exercise their voting
rights are regarded as Joint Holders under the Japanese large shareholding disclosure rules and they must file
notification of their aggregate share ownership with the relevant Japanese authority for public disclosure under
the Financial Instruments and Exchange Act. Oasis does not intend to be subjected to such notification
requirement. The Document exclusively represents the opinions, interpretations, and estimates of Oasis.
Media Contact
For all inquiries, please contact:
Taylor Hall
media@oasiscm.com