SEATTLE (Scrap Monster): Metsa Board has reached an agreement to sell 30% stake in its Husum pulp mill in Sweden to Norra Skog. It must be noted that the two companies had earlier entered into a long-term wood supply agreement. The proceeds of the transaction will be invested in new projects to boost its paperboard business.
The Husum pulp mill had recently obtained approval for its amended environmental permit. Accordingly, Metsa Board had finalized on the first phase of investment in the mill, which comprises of a new recovery boiler and turbine, which are expected to start up in the initial half of 2022. The investment for this phase is estimated at around Euro 320 million.
The transaction will assume an enterprise value of approximately Euro 875 million, subject to completion of the ongoing investment. After, the completion of the second phase, which involves installation of a new fiber line, the valuation is expected to surge higher to Euro 1.2 billion. It will reduce Metsa Board’s net debt by nearly Euro 260 million at the time of closing. The closing is expected to take place in January next year.
The association with Norra Skog is expected to further strengthen the Husum pulp mill’s wood availability. Metsa Board considers the mill as an excellent platform to launch the development of its paperboard business.