Oct 22 2009
UPM, Metsäliitto Cooperative, M-real Corporation, and Oy Metsä-Botnia Ab (Botnia) have today signed an agreement according to which Metsäliitto's and Botnia's share of the Fray Bentos pulp mill and the eucalyptus plantation forestry company Forestal Oriental in Uruguay will be transferred to UPM. The companies signed a letter of intent concerning the restructuring on 15 July 2009.
The enterprise value of the Fray Bentos pulp mill and Forestal Oriental totals approximately EUR 1.6 billion and the enterprise value of Botnia without the Uruguayan operations and shareholding in Pohjolan Voima Oy is approximately EUR 1.9 billion. UPM will finance the purchase consideration by selling an approximately 30% share in Botnia. In addition, UPM will take over the debt of the Uruguayan operations.
Moreover, UPM will acquire 1.2% of the energy company Pohjolan Voima Oy from Botnia for EUR 66 million.
Following the transaction, Metsäliitto's holding in Botnia will be approximately 50%, M-real's approximately 33%, and UPM's approximately 17%. UPM will have 91% ownership in the Fray Bentos pulp mill and 100% in Forestal Oriental.
Completion of the transaction is subject to, among others, required regulatory approvals and agreements with lenders. These are expected to be finalised, at the latest, during the first quarter of 2010. Botnia will remain to be in charge of the operations of the Fray Bentos pulp mill and Forestal Oriental until the transaction is effective.