Norske Skog to Sell Energy Company in Brazil
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Norske Skog, Lysaker, Norway, has agreed to sell all shares in its energy company Enerpar (Energias do Paraná Ltda) to a subsidiary of SN Power Invest AS in Brazil (SN Power Participações Ltda) for BRL 120 million, equivalent to NOK 410 million at the current exchange rate. The agreement secures the delivery of energy to Norske Skog's Pisa paper mill in Brazil through the end of 2014, and gives SN Power an annual supply of 1.2 TWh electric power from 2015 and up to December 31, 2025. SN Power Invest AS is owned 60% by Statkraft and 40% by Norfund.
"We have had excess energy in Brazil over a period of time. Through this sale, we secure energy at competitive terms for the Pisa mill, while at the same time realizing the real value of the long-term energy contracts. We are very satisfied with this, and the sale is an important step in our efforts to strengthen Norske Skog's financial position," said CEO of Norske Skog, Sven Ombudstvedt.
The cash effect after transaction costs is on the order of NOK 400 million, and reduces the gearing ratio from 0.90 at the end of the first quarter of this year to pro forma 0.85 after the sale. A minor gain is expected. The final accounting effect of the transaction will be announced in connection with publishing of the figures for the second quarter.
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