Helsinki, Finland, 30 September 2011 -- The Stora Enso and Arauco Montes del Plata joint-venture pulp mill project is proceeding and the external financing for the project has been finalized. Montes del Plata has signed the loan agreements, and as part of the financing arrangements, Stora Enso has signed an agreement to guarantee 50% of USD 1.35 billion of loans raised by Montes del Plata. Stora Enso's 50% share of the total guarantee will be a maximum of USD 677 million (EUR 498 million).
The project is financed by USD 900 million of export credit financing with 12 years tenor, by an A loan of USD 200 million with 12 years tenor from the Inter-American Development Bank (IDB) and by a B loan of USD 254 million with nine years tenor from commercial banks through IDB.
“We welcome the support of Finnvera, Finnish Export Credit (FEC), Swedish Export Credit (SEK), IDB, and other financing institutions for this exciting, strategically important project. We are also pleased with the long maturity of the credit facility,” said Markus Rauramo, Stora Enso CFO.
As announced on 18 January 2011, Montes del Plata will build a new state-of-the-art 1.3 million metric tons per year pulp mill at Punta Pereira, in the department of Colonia, Uruguay. The total investment is estimated to be approximately USD 1.9 billion (EUR 1.4 billion). Each of the joint-venture shareholders has a 50% stake in the mill's equity and will be entitled to half of its output. The project will be financed through equity and loans raised by Montes del Plata. Stora Enso is consolidating its 50% share with the equity method.
The project comprises a pulp mill, a deepwater port, and a power generating unit based on renewable resources. The new mill is expected to be operational by the end of the first quarter of 2013.
Stora Enso is a packaging, paper, and wood products company. The company provides innovative solutions based on renewable materials. Stora Enso employs some 26,000 people worldwide, and had sales in 2010 of EUR 10.3 billion. Stora Enso shares are listed on NASDAQ OMX Helsinki (STEAV, STERV) and Stockholm (STE A, STE R). In addition, the shares are traded in the USA as ADRs (SEOAY) in the International OTCQX over-the-counter market.