Stora Enso Agrees to Sell Kotka Mills to Private Equity Firm
April 22, 2010 - Stora Enso said that it has signed an agreement to sell its integrated mills at Kotka in Finland and its laminating paper operations in Malaysia to private equity firm OpenGate Capital.
The value of the deal, including earn-out, is about EUR 24 million, Stora Enso said
The divestment is expected to be finalised during the second quarter of 2010.
As part of the deal, Stora Enso will divest its laminating paper, special coated magazine paper and sawmill businesses at Kotka, including the fully-owned laminating paper subsidiary in Malaysia and the business operations of the Tainionkoski paper machine 7, which will remain in Stora Enso's ownership, but will be leased to the new owner.
The Kotka mill site and its buildings are included in the sale, the company said.
Based on 2009 annual figures, Stora Enso said the divestment is estimated to reduce its annual sales by EUR 203 million, improve its annual operating profit by EUR 11 million and reduce its working capital by EUR 24 million.
The divestment will reduce Stora Enso's annual production capacity by 180,000 tons of machine-finished coated paper (MFC), 200,000 tons of laminating paper and 40,000 tonnes of Imprex products and 230,000 m3 of sawnwood.
The 570 employees affected, including 480 working at Kotka, 50 at Tainionkoski and 40 in Malaysia, will transfer to the service of the new owner.
Stora Enso said that it will make an agreement about wood supply with OpenGate as part of the sale.
Stora Enso expects to close the deal in the second quarter of 2010.
About OpenGate Capital
OpenGate Capital is a private equity firm with headquarters in Los Angeles, California and a principal office in Paris, France.
SOURCE: Stora Enso