In December Norske Skog (OSE: NSG) said that the Board of Directors and corporate assembly had agreed that the historic Follum mill would be closed no later than on the 31st of March, removing some excess newsprint capacity. Forest owners association Viken Skog has been trying to purchase the operations, and had a 280 million NOK offer rebuffed since it has been important for Norske Skog that it does not become a direct competitor.
Today Norske Skog said an agreement has been made with the association so that Viken Skog is acquiring Follum to create new activities on the site. Net sales proceeds are around 60 million NOK with an accounting gain of around 30 million. Norske Skog Follum AS, Follum Industripark AS, and the properties at the site are comprise the deal.
Norske Skog will disassemble and retain parts of the technical production equipment and discontinue production on Friday. Authorities have been taking part in the discussions and it is likely funds will be directed towards research into new forest based products.
The company has also agreed to divest Norske Skog Bio Bio in Chile to a consortium of local investors for 56 million USD. The buyer intends to continue newsprint production at the mill. It has a capacity of 125 000 tons of newsprint, The divestments is in line with the company strategy to improve cash flow and financial position.
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