Helsinki, Finland 30 November 2018 -- The shareholders of Bergvik Skog AB, a Swedish forest holding company, have signed a binding agreement regarding the previously announced intent to restructure its ownership. With this agreement, the parties aim to complete the transaction during the first half of 2019. Stora Enso's forest holdings in Sweden will increase to 1.4 million hectares, of which 1.15 million hectares is productive forest land. The total value of the transaction in Stora Enso's balance sheet is estimated to be approximately EUR 1.0 billion.
"I am pleased that we have taken a step forward in this ownership restructuring along with the other shareholders in Bergvik Skog. This transaction is a natural next step for us, as we strongly believe in the bioeconomy and want to secure our competitive raw material supply for the long term. With direct ownership, we will have better visibility of our wood supply in Sweden. This will give us better opportunities to further develop sustainable forest management, thus strengthening our competitiveness," says Karl-Henrik Sundström, CEO of Stora Enso.
Currently, Bergvik Skog's Swedish forest assets are owned by its subsidiaries Bergvik Väst AB and Bergvik Öst AB, representing approximately 83% and 17% of these assets respectively. As a result of this transaction, Stora Enso will transform its current ownership of 49.8% in Bergvik Skog, to a direct holding of 69.8% of the value of the forest assets in Bergvik Väst.
Once all of the steps in the transaction have been finalised during the first half of 2019, it is expected that the financial impact for Stora Enso will be as follows:
• Bergvik Skog is currently reported as an equity accounted investment. Upon closure of the deal, Stora Enso's Swedish forest assets will be placed in a fully owned subsidiary and then consolidated line by line in Stora Enso's results.
• The transaction will result in a cash out effect of approximately EUR 200 million. Stora Enso's interest-bearing debt will increase by approximately EUR 800 million. The net debt to EBITDA ratio will increase by approximately 0.5x at the end of the sequence of the transactions, but will temporarily increase up to 0.8x prior to a special dividend being distributed by Bergvik Skog. The ratio was 1.1x at the end of the third quarter of 2018.
• Capital employed will increase by approximately EUR 1.0 billion, resulting in a decrease in the operational return on capital employed (ROCE) of approximately 1 percentage point.