M-real signs Letter of Intent to sell forest assests (30 December, 2004)

M-real Corporation Stock Exchange Bulletin 30.12.2004 at 1.30 p.m.

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-real's 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. 


M-real Corporation is a European paper and paperboard company with nearly
16,500 employees. M-real provides fibre-based solutions for consumer packaging,
communications and advertising end-uses. Through its worldwide sales network,
M-real serves its customers consisting mostly of publishers, printers, paper
merchants, offices and well-known consumer product companies. The turnover of
M-real in 2003 amounted to 6 billion euros. The company is headquartered in
Finland, and it is listed in the Helsinki Stock Exchange. 

www.m-real.com

About Us

Metsä Groupwww.metsagroup.com Metsä Group is a forerunner in sustainable bioeconomy utilising renewable wood from sustainably managed northern forests. Metsä Group focuses on wood supply and forest services, wood products, pulp, fresh fibre paperboards and tissue and greaseproof papers. In 2019, Metsä Group’s sales totalled EUR 5.5 billion, and it employs approximately 9,300 people. Metsäliitto Cooperative is the parent company of Metsä Group and is owned by approximately 103,000 Finnish forest owners.

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