Norske Skog Divests Part of Operations in Brazil

Norske Skog , Norway, reports that it has agreed to sell 51% of the shares in Norske Skog Pisa in Brazil to Papeles Bio Bio S.A., (former Norske Skog Bio Bio), which is controlled by Group BO/Pathfinder, a consortium of Chilean investors. The agreed purchase price for the 51% stake is $41.3 million.

The divestment is a part of Norske Skog's strategy to improve its cash flow and financial position. "We are pleased to be able to sell part of the Brazilian operations and enter into a partnership with an industrial player that we already know from the sale of our former Chilean operations back in 2012, and that has long-term plans for the Pisa mill," said Sven Ombudstvedt, president and CEO of Norske Skog.

"We are extremely happy to have Norske Skog as our partner in Brazil, a country where BO/Pathfinder currently controls a packaging business. This association will strengthen our position in the South-American market, and will allow us to give better service to our current and future customers," added Juan Obach, president of Papeles Bio Bio S.A.

The Pisa mill has a total newsprint production capacity of approximately 170 000 metric tpy, and is one of four newsprint mills in South-America. Papeles Bio Bio has agreed upon the terms of purchasing Norske Skog's remaining shares in the Brazilian operations within an expected time horizon of one to two years.

The buyer, Papeles Bio Bio S.A., is part of Group BO/Pathfinder. The Group also owns BO Packaging, which is one of the leading companies in the Chilean, Brazilian, and Peruvian packaging business. The investor consortium is headed by the BO/Pathfinder Group, former owners of Masisa, and has interests in graphic, packaging, glass products, building products, agribusiness, and real estate.

Closing of the 51% share transaction is expected to take place this month.