M-real Agrees to Sell Hallein Pulp mill in Austria to Schweighofer Group
June 30, 2011 - M-real has signed an agreement to divest the entire share capital in M-real Hallein GmbH (Austria) to the Schweighofer Group.
The debt-free value of the deal is approximately EUR 34 million and will have a positive cash impact for M-real of around EUR 24 million.
M-real Hallein assets include the Hallein pulp mill, bioenergy plant, paper mill (closed in 2009), and the surrounding estate.
The pulp mill employs some 200 people and has the capaciyt to produce about 160,000 tonnes per year of sulphite pulp.
M-real said the divestment is expected to reduce its annual sales by approximately EUR 75 million and improve the operating result by approximately EUR 5 million based on Hallein millís actual performance in 2010.
"M-real is focusing on cartonboard business and this transaction is a good example of our work to divest the non-core assets," said Mikko Helander, CEO of M-real. "M-real does not use pulp from Hallein in its own board or paper operations and the profitability of the mill as a market pulp supplier has not met our targets.
"This is a good solution also for the mill as the new owner is in a better position to develop the operation further," he added.
The deal is subject to the approval of Austrian competition authorities and it is expected to close during the third quarter of 2011.
M-real said that it will continue to sell Hallein pulp to the market during the 12-15 months following the closing until the new owner has established their own sales organization and systems.
The Schweighofer Group is a family owned, Austrian based holding company with companies in different branches and countries. The main focus of the group is forest industry.