Finnish paper maker Stora Enso said yesterday it would sell its sawn wood and paper mills in Kotka, Finland, and its Malaysian laminating paper subsidiary to private equity firm OpenGate Capital.

“The total consideration including earn-out is up to 24 million euros [32 million dollars]”, it said in a statement, adding it had recorded a 23-million-euro write-down relating to working capital and fixed assets in the first quarter.

The sale, which it expected to reduce annual sales by 203 million euros and improve operating profit by 11 million euros, was expected to be finalised during the second quarter of 2010, Stora Enso said.

The 570 workers affected by the sale would be transferred to the service of the new owner, it added.

It would also permanently close down newsprint production at its site in Varkaus, Finland, due to a “dramatically deteriorated” situation in newsprint, it said in a separate statement, adding some 200 jobs would be slashed.

It said the closures would decrease the group’s annual newsprint segment sales by 148 million euros and boost operating profit by 9 million euros.
Stora enso would keep its pulp and fine paper mills in Varkaus in production, however, “as long as financially viable” as the supply and demand balance and the pricing of office paper had improved since it announced the permanent closure of the site in August 2009.

(Macau Daily Times, 25/04/2010)