M-real Divests Hallein Pulp mill to Schweighofer Group
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M-real Oyj, Espoo, Finland, part of Metsäliitto, has signed an agreement to divest its entire share capital in M-real Hallein GmbH, Austria, to the Schweighofer Group. M-real Hallein GmbH assets consist of the Hallein pulp mill, bioenergy plant, paper mill closed in 2009, and the surrounding estate. The debt-free value of the transaction is approximately EUR 34 million and the positive cash impact for M-real is approximately EUR 24 million.
The Hallein pulp mill has an annual production capacity of approximately 160,000 metric tons of sulfite pulp. It employs about 200 people. The divestment is expected to reduce M-real's annual sales by some EUR 75 million and improve the operating result by approximately EUR 5 million based on Hallein mill's actual performance in 2010.
"M-real is focusing on the cartonboard business and this transaction is a good example of our work to divest the non-core assets. M-real does not use pulp from Hallein in its own board or paper operations and the profitability of the mill as a market pulp supplier has not met our targets. This is a good solution also for the mill as the new owner is in a better position to develop the operation further," said Mikko Helander, CEO of M-real.
The transaction is subject to the approval of Austrian competition authorities and is expected to be closed during the third quarter of this year. M-real says it will continue to sell Hallein pulp volumes to the market during the 12-15 months following closing until the new owner has established its own sales organization and systems.
The Schweighofer Group is a family owned, Austrian-based holding company with companies in different branches and countries. The main focus of the group is the forest industry.
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