Business News

Stora Enso divests its Kotka Mills to OpenGate Capital

Thursday 22. April 2010 - Stora Enso has signed an agreement to sell its integrated mills at Kotka in Finland and its laminating paper operations in Malaysia to private equity firm OpenGate Capital to focus Stora Enso's business portfolio as announced on 19 August 2009. The total consideration including earn-out is up to EUR 24 million. Stora Enso has recorded a write down of EUR 23 million relating to working capital and fixed assets as non-recurring items in its first quarter 2010 results. The divestment is expected to be finalised during the second quarter of 2010.

As part of the transaction, Stora Enso will divest its laminating paper, special
coated magazine paper and sawmill businesses at Kotka, also including the
fully-owned laminating paper subsidiary in Malaysia, and the business operations
of the Tainionkoski paper machine 7, which will remain in Stora Enso’s
ownership, but will be leased to the new owner. The Kotka mill site and its
buildings are included in the divestment.

Based on 2009 annual figures, the divestment is estimated to reduce Stora Enso’s
annual sales by EUR 203 million, improve its annual operating profit by EUR 11
million and reduce its working capital by EUR 24 million. This operating profit
improvement of EUR 11 million is included in the estimate of EUR 140 million to
EUR 160 million profit improvement arising from the proposed closures,
divestments and product swaps announced on 19 August 2009.

The divestment will reduce Stora Enso’s annual production capacity by 180 000
tonnes of machine-finished coated paper (MFC), 200 000 tonnes of laminating
paper and 40 000 tonnes of Imprex products and 230 000 m3 of sawnwood. The 570
employees affected, including 480 working at Kotka, 50 at Tainionkoski and 40 in
Malaysia, will transfer to the service of the new owner. Stora Enso and OpenGate
Capital will make an agreement about wood supply as part of the divestment.