Stora Enso to sell its Grycksbo and Linghed mills
STORA ENSO OYJ Stock Exchange Release 2 March 2006 at 9.00
Stora Enso to sell its Grycksbo and Linghed mills
Grycksbo Fine Paper Mill and Linghed Sawmill are being divested
as part of Stora Ensos Asset Performance Review (APR), which
aims to secure a competitive European production base. Six mills
are to be divested under the APR following assessment of their
profit potential, strategic fit and realisable value.
Grycksbo Mill
Stora Enso has signed an agreement to sell its Grycksbo Mill in
Sweden to Accent Equity, a Stockholm-based private equity firm.
The transaction is expected to be closed by the end of March
2006. The sales price of the equity is SEK 350 million (EUR 37
million) and the Groups interest-bearing net liabilities will
decrease by the same amount. The Group will record a capital
loss of about EUR 20 million in its first quarter results.
Stora Ensos annual sales will decrease by approximately EUR 140
million and the working capital will be reduced by approximately
EUR 6 million following the Grycksbo Mill divestment. The
divestment will have no material effect on operating profit.
The divestment of Grycksbo Mill is consistent with the Groups
strategy of concentrating its coated fine paper business on
multi-coated graphical grades. Grycksbo Mill specialises in
matt-coated fine papers, which it will continue to produce under
its new ownership. Stora Enso will thereby exit this business
line.
Stora Enso will continue to support Grycksbo Mill with certain
services, including pulp supply, transport and sales support,
for an agreed period of time to ensure an orderly transition to
a stand-alone basis.
Grycksbo Mill is a non-integrated producer of on-machine coated
woodfree paper with annual capacity of around 250 000 tonnes.
The mill, in Dalarna province in central Sweden, employs around
500 persons.
Accent Equity Partners is a leading lower mid-market private
equity firm investing in buyout and later-stage expansion
capital transactions in the Nordic region.
Linghed Sawmill
Stora Enso has also signed an agreement to sell its Linghed
Sawmill in Sweden to Dalarna Lumber AB of Sweden. The sales
price is SEK 10 million (EUR 1.1 million). Stora Ensos annual
sales will decrease by approximately EUR 7 million and the
working capital will be reduced by approximately EUR 1 million
following the Linghed Sawmill divestment. The impact of the
transaction on the Groups profits will not be material.
The transfer will take effect immediately and includes
buildings, stocks and production assets. All the 28 employees
have been offered employment with the new owner as existing
employees. Linghed Sawmills production volume was 35 000 m3 in
2005.
For further information, please contact:
Hannu Ryöppönen, CFO, tel. +44 20 7016 3114
Magnus Diesen, EVP, Corporate Strategy, tel. +44 20 7016 3117
Kari Vainio, EVP, Corporate Communications, tel. +44 7799
348 197
Keith B Russell, SVP, Investor Relations, tel. +44 7775 788 659
Ulla Paajanen-Sainio, VP, IR and Financial Communications, tel.
+358 2046 21242
www.storaenso.com
www.accentequity.se
Previous press releases concerning Grycksbo Mill and the APR available at
www.storaenso.com/press
- 23 August 2005: Stora Enso is exploring the possibility of selling its
Grycksbo Mill
- 27 October 2005: Stora Enso creates platform for stronger financial
performance
STORA ENSO OYJ
p.p. Jussi Siitonen Jukka Marttila