M-real to Divest Premium Paper Business

April 12, 2011 - M-real said that it has signed a Memorandum of Understanding regarding a divestment of the Premium Paper business to a sister company of Papierwerke Lenk AG. The divestment would include the complete Premium Paper business and related assets as well as about 100 of M-realís employees.

Premium Paper products are used in high quality graphical end-uses, such as letterhead, brochures, books, calendars and envelopes.

Mikko Helander, CEO, M-real.

M-real said that it will continue the carbonless business at its Reflex mill in Germany.

ďThe planned divestment of the Premium Papers is a natural step in M-realís strategy and a proof of M-realís capability to divest its non-core paper business consistently," said Mikko Helander, M-real's CEO.

"We are satisfied with the good solution in which the Premium Paper business will be transferred to the new owner who can focus to develop this segment successfully in the future,Ē Helander added.

If the deal is completed as planned, M-real would book a negative EUR 12 million non-recurring item in Speciality Papers business area. Cash impact would be approximately EUR 1 million negative, M-real said.

The planned divestment does not have a material impact on M-real's operating result, the company said.

M-real expects the deal to close during the second quarter of 2011.

In October of 2010, M-real sold its paper machine 5 and some related assets at the Reflex site to Metsa Tissue.

Papierwerke Lenk AG is a German Black Forest-based paper producer with sales of approximately 35.000 tonnes of specialty papers.

SOURCE: M-real