Stora Enso (OMX: STE1RV) announced upon publicizing its Q4 2011 non-recurring items, that is has written-off approximately 11 million Euros related to shares and loan receivables in Arktos Group. Arktos Group (then Anaika) started running an engineering workshop and a glue laminating factory on Stora Enso Kemijärvi pulp mill premises after the mill’s closure in 2008. Stora Enso owns 20% of it.
Arktos Kemijärvi glue laminating line's finance structure was almost entirely dependent on Stora Enso. The Finnish State has been funding the factory with several millions Euros, and Stora Enso has used far more than that, but the company has so far failed to make the business viable. Now only one week after Stora Enso had said the funding is stopping, Arktos said that given the fact that investment and operative funding of the factory is now open, it has decided to stop all operations until new financing can be found. Co-determination negotiations involving 70 employees have begun.
Arktos’ Mikkeli Engineering workshop and Pori Mill, which is a contract manufacturer to UPM Kymmene (OMX: UPM1V) continue normal operations. It is less clear what will happen with Peuravuono saw mill and Seskarö Såg AB, two small saw mills owned by related party Morven Ltd Oy, that were supposed to deliver material to Kemijärvi (as a matter of fact all of their sawed timber is delivered to Arktos).
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