Stora Enso Selling Pankakoski Mill to Investors
Jul 21, 2006 - Stora Enso said that it has signed a definitive agreement to sell its Pankakoski Mill in Finland to an international group of investors led by Dr Dermot Smurfit and including Lansdowne Capital Limited. The debt-free sales price is EUR 20 million, subject to closing date adjustments, and the Group's interest-bearing net liabilities will decrease by the same amount. The Group has recorded a capital loss of EUR 11.0 million as a provision in its second quarter 2006 results.
Annual sales of Stora Enso's Packaging Boards division will decrease by approximately EUR 60 million and the working capital will be reduced by approximately EUR 12 million following the Pankakoski Mill divestment. The divestment, which is expected to be completed by the end of July 2006, will have no material effect on the Group's future operating profit.
The divestment is part of Stora Enso's Asset Performance Review (APR), which aims to secure a competitive European production base.
"We are pleased to have found a buyer dedicated to continuing production and development at Pankakoski Mill. The success of the purchaser's Powerflute mill will certainly help Pankakoski further develop its position as a speciality board mill," says Ohto Nuottamo, Senior Vice President, Stora Enso Carton Boards.
Pankakoski Mill was part of Stora Enso's Packaging Boards division. The mill produces speciality paperboards for packaging and graphical end uses on two board machines with a total annual capacity of around 100,000 tonnes. Pankakoski Mill, at Lieksa in Finland, employs about 200 people.
The buyer, a group of international private investors including Lansdowne Capital Limited and Dr Dermot Smurfit, will establish a new company to run the operations at the mill. The same group of investors owns Powerflute Ltd, which operates a semi-chemical fluting mill in Finland.
Stora Enso Group's non-recurring items in second quarter 2006
There are two non-recurring items with a net impact of EUR 6.7 million on operating profit: EUR -11.0 million related to divestment of Pankakoski Mill and EUR 17.7 million due to changes in Stora Enso's Finnish unemployment insurance provisions.
SOURCE: Stora Enso