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HELSINKI, March 29 (Reuters) - Finland’s Stora Enso is planning to sell four of its five paper mills, the forestry group said on Tuesday.
“In line with Stora Enso’s strategy, paper is not a strategic growth area for the group,” the company said in a statement.
The divestments will cut Stora’s revenue and impact cash flow but in exchange the company’s share valuation will improve as it gets rid of a division with weak future prospects, Inderes analyst Antti Viljakainen told Reuters.
“On the operating profit level, 2020 and 2021 have been negative,” he said, adding he saw it unlikely that Stora would find one buyer for all the mills.
The company’s shares were up 2.6% at 18.8 euros ($20.64) in midday trade.
Assisted by investment bank BofA Securities, Stora is looking for one or several buyers for its mills in Finland’s Anjala, Germany’s Maxau and Sweden’s Hylte and Nymolla but has no deadline for the divestments.
Stora’s paper division employs approximately 2,200 people and in 2021 generated 1.7 billion euros in revenue.
If the plants are sold, personnel will be included in the sale, Stora spokesperson Satu Harkonen told Reuters but emphasised the process was still at a very early stage.
Stora will keep its mill in Belgium’s Langerbrugge because it produces magazine paper from used cardboard cups, Harkonen said, adding the site could later be converted to make cardboard although the company has no such plans yet.
$1 = 0.9107 euros Reporting by Essi Lehto, editing by Terje Solsvik, Kirsten Donovan and David Evans
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