International Paper to Exit Chinese Coated Board Joint Venture, IP-Sun
International Paper has agreed to sell its 55% equity interest in its Chinese coated board joint venture, IP-Sun.
Oct. 9, 2015 - International Paper yesterday announced that it has entered into a definitive agreement with its Chinese coated board joint venture partner, Shandong Sun Holding Group Co., Ltd., to sell its 55% equity interest in the joint venture (IP-Sun JV). As consideration for the sale, International Paper will receive RMB 149 million (or approximately US$23 million) in cash.
Additionally, International Paper will remove approximately $400 million of currently outstanding debt from its balance sheet, along with the other assets and liabilities of the IP-Sun JV, following completion of the transaction.
International Paper also announced today that it is pursuing strategic options for its corrugated box business in China and South East Asia and has signed a non-binding letter of intent with a prospective buyer based in China.
"International Paper undertook a thorough review of its position in serving the Chinese and Asian markets," said Mark Sutton, International Paper Chairman and CEO. "The Company remains committed to serving these very important markets, but concluded we could be more effective supplying this region with globally competitive products primarily through our Ilim joint venture in Russia and from the U.S."
The IP-Sun JV transaction is expected to be completed within the next six months, subject to satisfaction of closing conditions, including obtaining required Chinese governmental approvals.
International Paper estimates the agreement to sell the Chinese coated board joint venture, which started in 2006, will result in net pre-tax noncash asset write-offs of approximately US$200 million to be recorded in the third quarter of 2015.
International Paper is a global leader in packaging and paper with manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa. Its businesses include industrial and consumer packaging along with uncoated papers and pulp. To learn more, please visit: internationalpaper.com.
SOURCE: International Paper