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Powerflute Oyj to Sell its Graphic Paper Interest to Paper Excellence BV

Kuopio, Finland, 06 May 2011 -- Powerflute Oyj has agreed to sell its interests in the Papierfabrik Scheufelen group of companies, which represent Powerflute’s entire interest in coated woodfree papers and the whole of the Graphic Papers business segment, to Paper Excellence BV, a privately owned pulp and paper producer. In exchange, Powerflute will receive EUR 38.5 million, comprising cash consideration of EUR 32.5 million payable in two instalments (EUR 25.0 million at completion and EUR 7.5m on 31 October 2011) and Paper Excellence will assume EUR 6.0 million of.

"We are pleased to announce the disposal of Scheufelen to Paper Excellence and believe this represents a successful outcome for both the customers and employees of Scheufelen and for Powerflute’s shareholders," said Dermot Smurfit, chairman of Powerflute. "Scheufelen will benefit as part of an integrated pulp and paper group and will continue to prosper under new ownership. Powerflute has achieved a significant return on its investment in a little over two years – a strong validation of our business strategy. On completion of the disposal, Powerflute will be debt free on a net basis and will have the capital structure and resources to continue to pursue its strategy of seeking opportunities to acquire underperforming businesses in the paper and packaging sectors."


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