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2009-07-15 13:00:02 CEST 2009-07-15 13:01:05 CEST REGULATED INFORMATION M-real - Company AnnouncementA letter of intent regarding the new ownership structure of Metsä-BotniaM-real Corporation Stock Exchange Release 15 July 2009 at 14:00 M-real Corporation's associated company Oy Metsä Botnia Ab and its owners, M-real, Metsäliitto Cooperative and UPM-Kymmene Oyj, have signed a letter of intent regarding the divestment of the pulp mill and forests located in Fray Bentos, Uruguay, to UPM. Once the transaction is closed, M-real's net debt will decrease by around EUR 550 million, also taking into account the change of Metsä-Botnia's consolidation method in M-real's consolidated financial accounts. Cash proceeds to be received by M-real is around EUR 300 million. M-real will use the proceeds for debt repayments. The arrangement will not have a significant impact on M-real's equity. After the closing of the transaction, M-real will change the consolidation method of Metsä-Botnia in its consolidated financial accounts and process its ownership in Metsä-Botnia as an associated company according to IAS 28. As a result of the transaction and the change in the consolidation method, approximately EUR 250 million of consolidated net debt will leave M-real Group. The closing of the transaction and the change in the consolidation method of Metsä-Botnia are estimated to decrease M-real's annual sales by around EUR 250 million and to slightly improve the result before taxes compared to the first quarter 2009. The closing of the transaction is subject to approvals by the respective parties' Board of Directors, the execution of final agreements, conclusion of negotiations with financing parties and approval of the competition authorities. The transaction is estimated to be closed during the last quarter of 2009. After the closing of the transaction M-real owns 30 % of Metsä-Botnia, Metsäliitto Cooperative 53 % and UPM 17 %. M-real's Board of Directors has processed and approved the letter of intent acting without those of its members who are dependent on Metsäliitto Cooperative. At the request of M-real's Board of Directors Handelsbanken Capital Markets has issued a Fairness Opinion, according to which the transaction is financially fair from the point of view of M-real's shareholders. Castren & Snellman Oy, Attorneys-at-law, provides legal advice in the transaction."Our need for eucalyptus pulp decreased significantly as a result of the divestment of the Graphic Papers business at the and of last year, which is why the Metsä-Botnia's Uruguay-based pulp mill became strategically less important for M-real. Centralising Metsä-Botnia's production in Finland supports M-real's strategy in packaging business: high-quality Finnish pulp is an essential raw material for paperboard. As a result of this transaction, the net debt and pulp surplus of M-real will clearly decrease. This transaction when closed, together with the well-progressed, still ongoing strategic review of the paper business, have considerably renewed and restored M-real," says Mikko Helander, CEO of M-real. M-real will arrange a conference call and webcast for analysts today at 5.30 p.m. Finnish time. Participating in the call will be CEO Mikko Helander and CFO Matti Mörsky. From Finland please dial 0800 112 469 and from other countries +44 (0) 1452 559 645. The live webcast can be accessed at http://qsb.webcast.fi/mreal/ For more information: Matti Mörsky, CFO, tel. +358 10 465 4913 Juha Laine, Vice President, Investor Relations and Communications, tel. +358 10 465 4335 |
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