Stora Enso signed an agreement with Hagen-Kabel Pulp & Paper, i.e. a company owned by a group of German investors, to sell the production plant of Kabel, a producer of coated paper with wood in Germany. The operation is in line with Stora Enso’s strategic transformation into a company engaged in the development of renewable materials. The transaction should be finalized during the third quarter of 2016. The cash compensation for the sale of the assents if about 23 million Euros, whereby this sum is subject to possible adjustments on the closing day. The loss resulting from the sale is in total 15 million Euros. The effect on the net operating result is about 5 million Euros, while the negative tax impact is about 10 million Euros. This data will be registered as a non-recurring element of the second quarter of 2016 within Stora Enso’s results. With the finalization of this transaction, about 17 million Euros in pension liabilities will be transferred to the new owner. As explained by the paper division Executive Vice President at Stora Enso Kati ter Horst, «the Kabel paper mill enjoys an excellent reputation and a good customer base. We believe that the site will be able to further develop its activities with the new owners».
Based on 2015 annual data, the sale foresees to reduce Stora Enso’s annual sales by about 300 million Euros. This sale will furthermore reduce the company’s annual capacity of paper production of about 485 thousand tons of paper. The Kabel production plant employs about 540 people. The whole staff will be transferred to the new owner. The transaction is not expected to impact significantly on Stora Enso’s operational result in the future. The company will continue producing coated paper with wood with the Novapress brand at its production site in Veitsiluoto, Finland.