The alternative to the company's proposal will likely lead to bankruptcy at the parent company Norske Skogindustier ASA but Norske Skog AS and the mills will continue operations as normal under new ownership.
Norske Skog group has launched a new recapitalisiation proposal. According to the parent company Norske Skogindustrier ASA, this proposal provides a final opportunity to reach a consensual solution among all bondholders and shareholders.
Among the the key terms of the proposed recapitalisation transaction is the conversion into equity of all outstanding, secured and unsecured bond debt, resulting in secured note holders acquiring 94% equity ownership in Norske Skogindustrier ASA.
The creditors will have ten-business-days time period to consider the proposal. In order to be implemented the recapitalisation proposal requires the approval of a majority in number and 75% in value. The existing shareholders of Norske Skogindustrier ASA are expected to vote on the proposal in an extraordinary general meeting to be called shortly after the consent solicitation offer period has expired, the company explained. The proposal will need a support of a two-third majority.
"[T]his proposal provides a final opportunity to reach a consensual solution among all bondholders and shareholders. I accordingly urge all stakeholders of the Norske Skog group to support the recapitalization proposal, as all other alternatives will entail less value and complicated insolvency processes", said Christen Sveaas, Chairman of the Norske Skog group.
