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2009-10-22 07:30:09 CEST 2009-10-22 07:31:13 CEST REGULATED INFORMATION M-real - Company AnnouncementAgreement regarding the new ownership structure of Metsä-Botnia signedM-real Corporation Stock Exchange Release on 22 October 2009 at 8:30 am M-real Corporation, a part of Metsäliitto Group, announced on 15 July 2009 that its 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 new ownership structure of Metsä-Botnia and the divestment of Metsä-Botnia's Uruguayan operations to UPM. The master agreement regarding this transaction was signed on 22 October 2009. Pursuant to the agreement, Metsä-Botnia will sell all its holdings in Uruguayan operations to UPM. The agreed total value of the pulp mill and forest assets in Uruguay is approximately EUR 1.6 billion. In addition, Metsä-Botnia will sell 77 per cent of its holding in Pohjolan Voima Oy to UPM for a consideration of EUR 66 million. Concurrently, Metsä-Botnia will distribute dividends and capital repayments to its shareholders, of which M-real's share is about EUR 300 million. Pursuant to the agreement, Metsä-Botnia will acquire its own shares from UPM and will cancel them. As a result, M-real's ownership in Metsä-Botnia increases by 3.0 percent-units. M-real and Metsäliitto Cooperative have agreed that Metsäliitto Cooperative will acquire such 3.0 per cent holding of Metsä-Botnia from M-real. The agreed total value of Metsä-Botnia without its Uruguayan operations and Pohjolan Voima Oy shares is approximately EUR 1.9 billion. Metsäliitto Cooperative will pay its share purchase from M-real with a market priced vendor note of EUR 50 million, having a maturity of 3 years. Upon 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. When closed, the transaction will reduce M-real's net debt compared to the end of the second quarter in 2009 by approximately EUR 550 million when taking into account the cash consideration of EUR 300 million, the market priced receivable of EUR 50 million from Metsäliitto and the change in the consolidation method for the consolidated financial statements of M-real. M-real will use the funds for paying off its debts. The transaction will not have a significant impact on M-real's equity. 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 approximately EUR 250 million and to slightly improve the result before taxes compared to the first half of 2009."Concentrating Metsä-Botnia's production to Finland supports M-real's strategy in its packaging business. As a result of the divestment of the Graphic Papers business eucalyptus pulp is no longer an important raw material for M-real. In addition, the transaction will decrease net debt and pulp surplus of M-real," says Mikko Helander, CEO of M-real. The transaction is still subject to the conclusion of negotiations with financing parties and approvals by competition authorities. The transaction is expected to be completed latest during the first quarter of 2010. After the closing of the transaction M-real owns 30 per cent, Metsäliitto Cooperative 53 per cent and UPM 17 per cent of Metsä-Botnia. The Board of Directors of M-real has reviewed and approved the transaction without those of its members who are dependent on Metsäliitto Cooperative. Upon request of the Board of Directors of M-real, 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. Castrén & Snellman Oy, Attorneys-at-law, has acted as the company's legal advisor. For further information, please contact: 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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