Stora Enso will record a write-down of at maximum USD 575 (EUR 418) million related to its 19.9% NewPage shareholding and vendor note as a non-recurring item in its second quarter 2009 results
Stora Enso will record a write-down of at maximum USD 575 (EUR 418) million related to its 19.9% NewPage shareholding and vendor note as a non-recurring item in its second quarter 2009 results
STORA ENSO OYJ STOCK EXCHANGE RELEASE 15 July 2009 at 20.10 GMT Stora Enso Oyj, NewPage Corporation (“NewPage”) and NewPage's largest shareholder, Cerberus Capital Management, L.P. (“Cerberus”), announced a plan to reorganise NewPage's capital structure through a series of concurrent transactions, including debt tender offers and a potential contribution and cancellation of a portion of the NewPage vendor note held by Stora Enso and the debt acquired by Cerberus. As a result of the concurrent transactions and poor prospects of an upturn in the market, Stora Enso will record a write-down of at maximum USD 575 (EUR 418 net of hedges) million related to its NewPage shareholding and vendor note as a non-recurring item in its second quarter 2009 results. The final write-down amount depends on the result of a tender offer by an affiliate of Cerberus and NewPage, the amount of the vendor note owned by Stora Enso that is contributed and cancelled as part of the concurrent transactions and the fair value of the remaining vendor note. This write-down will have a maximum impact of only USD 308 (EUR 212 net of hedges after tax) million on Stora Enso's equity because these unlisted shares and the vendor note have previously been revalued and the USD 267 (EUR 201) million change in their fair value has been recorded in equity as part of Other Comprehensive Income. As part of these concurrent transactions, Stora Enso's NewPage vendor note issued by NewPage Group with nominal value of USD 200 million (EUR 142 million) and accrued interest may be partially (50-65%) contributed and cancelled. The conversion is subject to successful debt recapitalisation by NewPage and an affiliate of Cerberus, NewPage's indirect controlling shareholder, and their election to forgive debt in Cerberus' sole discretion. The concurrent transactions are expected to be finalised by the end of the third quarter of 2009. The concurrent transactions are intended to strengthen New Page's capital structure and its position as the leading coated paper producer in North America by increasing its operating flexibility. The vendor note formed part of the transaction consideration when Stora Enso finalised the divestment of its North American paper operations to NewPage on 21 December 2007. Following the contribution and cancellation of a portion of the vendor note, the percentage of NewPage shares owned by Stora Enso will remain 19.9%. Stora Enso's second quarter results will be announced on 23 July 2009. For further information, please contact: Markus Rauramo, CFO, tel. +358 2046 21121 Ulla Paajanen-Sainio, SVP, Investor Relations, tel. +358 40 763 8767 www.storaenso.com www.storaenso.com/investors Stora Enso is the world leader in forest industry sustainability. We offer our customers solutions based on renewable raw materials. Our products provide a climate-friendly alternative to many non-renewable materials, and have a smaller carbon footprint. Stora Enso is included in the Global 100 list of the world's most sustainable companies. Stora Enso is also listed in the Dow Jones Sustainability Index, the FTSE4Good Index, and the Climate Disclosure Leadership Index. Stora Enso employs 29 000 people worldwide, and our sales in 2008 amounted to EUR 11.0 billion. STORA ENSO OYJ Ulla Paajanen-Sainio Jari Suvanto