Norske Skog Sells Energy in Brazil
May 26, 2011 (Press Release) - Norske Skog has entered into an agreement to sell all the shares in the energy company Enerpar (Energias do Paraná Ltda) to a subsidiary of SN Power Invest AS in Brazil (SN Power Participações Ltda) for BRL 120 million, equivalent to NOK 410 million at the current exchange rate.
The agreement secures the delivery of energy to Norske Skog's paper mill Pisa in Brazil through to the end of 2014, and gives SN Power an annual supply of 1.2 TWh electric power from 2015 and up to 31 December 2025.
"We have had excess energy in Brazil over a period of time. Through this sale, we secure energy at competitive terms for the Pisa mill, while we at the same time realize the real value of the long-term energy contracts. We are very satisfied with this, and the sale is an important step in our efforts to strengthen Norske Skog's financial position," says CEO of Norske Skog, Sven Ombudstvedt.
The cash effect after transaction costs is in the order of NOK 400 million, and reduces the gearing ratio from 0.90 at the end of 1st quarter 2011, to pro forma 0.85 after the sale. A minor gain is expected. The final accounting effect of the transaction will be announced in connection with publishing of the figures for the second quarter. Settlement took place on 25 May.
SN Power Invest AS is owned 60% by Statkraft and 40% by Norfund.
SOURCE: Norske Skog