Norske Skog will sell its last publication paper mill in the Australasian region to Boyer Capital Pty Ltd, a local private equity investment company. The purchase price is based on an enterprise value of NOK190m. The transaction is scheduled to be completed during the first quarter of this year.
The mill is Norske Skog's last remaining production site for publication paper in the Australasian region after it closed down its Tasman paper mill in 2021 and sold it to Oji Fibre two years later. The Norske Skog Boyer mill is situated in Tasmania and is geared for a production of 150,000 tpy of newsprint and 135,000 tpy of LWC magazine paper. Norske Skog reports that the mill has contributed an average of approximately NOK60m in Ebitda to Norske Skog in the period from 2022 to 2024.
After the sale of the Boyer mill, Norske Skog will have four mills in Europe (Skogn and Saugbrugs in Norway, Golbey in France and Bruck in Austria). They have a total combined output capacity of 760,000 tpy of containerboard, 840,000 tpy of newsprint, 200,000 tpy of SC magazine paper and 265,000 tpy of LWC magazine paper.
Norske Skog said that the mill would continue its operations under the new ownership. The new owner Boyer Capital says that it sees significant potential to expand and diversify the industrial activities at the Boyer mill. The site has a total area of 565 hectares, "offering significant opportunities for future developments, and good acces to raw materials and logistics infrastructure."
The transaction is a sale of 100 per cent of the share capital in Norske Skog Industries Australia Limited, the holding company for of Norske Skog's Australasian activities. Norske Skog said it would discontinue the reporting segment publication paper Australasia in its results for the fourth quarter of 2024. No gain or loss is expected to be recognised in the company's first quarter results as a result of the transaction.
Norske Skog says the transaction strengthens its balance sheet and liquidity positions towards ongoing strategic projects. It will now focus fully on the successful ramp-up of containerboard production at its Golbey mill in France and completing the BCTMP study at the Saugbrugs mill. The ramp-up of the containerboard machine at the Golbey mill is expected to start in the first quarter of this year. At its Saugbrugs mill, Norske Skog is carrying out a study on the possible production of BCTMP at the site. A final decision on the project is expected to be made in the first half of this year.
Final settlement on Saugbrugs mill insurance payments
Norske Skog Saugbrugs and its insurance company agreed on a final settlement of all remaining insurance claims related to the rockslide at the Saugbrugs site on 27 April 2023. The settlement amount of NOK540m will be jointly covered by the insurance company, the Norwegian Natural Perils Pool and the reinsurers, the company says.
"We are pleased to have reached a final settlement with our insurance company regarding the remaining property damage claims at Saugbrugs. The dialogue with the insurance company has since the incident been very open, fair and professional. This settlement provides time and flexibility to invest and develop Saugbrugs for the future”, says Geir Drangsland, CEO of Norske Skog.
The settlement amount represents a discount to prior estimates of remaining insurance compensation related to the property damage but enables Saugbrugs to freely determine the time at which compensation is utilised in its business activities as well as the nature of such activities. Payment of the full settlement amount is expected during the first quarter of 2025 and will thus be recognised in Ebitda in the first quarter of 2025.
