M-REAL SIGNS LETTER OF INTENT TO SELL FOREST ASSETS
M-real Corporation Stock Exchange Bulletin 30.12.2004 at 1.30 p.m.
M-REAL SIGNS LETTER OF INTENT TO SELL FOREST ASSETS
M-real has signed a Letter of Intent to sell its forestland to a
company to be founded called Forestia Holding Oy. The total
transaction value is EUR 172 million of which M-real´s share is 95%.
The transaction will not have a material effect on M-reals result.
The owners of Forestia Holding Oy will be Metsäliitto Cooperative
with a share of 49.9%, Suomi Mutual Life Assurance Company with a
share of 39.9% and the Central Union of Agricultural producers and
Forest owners with a share of 10.2 %. The forestland comprising
approximately 120,000 ha is currently owned by Forestia Oy, of which
M-real´s ownership is 95% and Metsäliitto Cooperative´s 5%.
As part of the overall arrangements, M-real will underwrite about EUR
24 million of the subordinated debenture which Forestia Holding Oy
will issue in connection with the transaction. The bonds will yield
8.5% interest and M-real intends to sell them in the secondary
market.
Under the terms of the transaction, Forestia Holding Oy will buy the
forest land of Suomi Mutual Life Assurance Company for a
consideration of about EUR 21 million.
The parties plan to complete the transaction before the end of March
2005.
The deal is part of M-real´s action plan to divest its non-core
assets.
M-REAL CORPORATION
Corporate Communications
For additional information, contact Chief Financial Officer Juhani
Pöhö, tel. +358 50 598 7607, kindly before 4.30 p.m.
