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Equity firm buys newsprint maker Norske Skog

Wednesday, 09 May 2018
By Print21

Norske Skog Boyer, Tasmania.

A private equity firm has signed a $373m deal to buy bankrupt newsprint and magazine paper manufacturer Norske Skog, which operates two mills in Australia and one in New Zealand. 

Norske Skog Australasia is the region’s leading newsprint and magazine paper maker.

London investment firm Oceanwood Capital won the auction process for the Norway-based global paper manufacturer and has entered into a sale and purchase agreement to buy the issued share capital of Norske Skog for €235m ($373m). The board of Norske Skog had filed for bankruptcy in December 2017.

Norske Skog has seven mills around the world, including two in Australia – which produce most of the country’s newsprint – and one in New Zealand. The AMWU says the agreement secures the jobs of hundreds of local mill workers.

Norske Skog Boyer in Tasmania employs about 270 people, with an annual production of around 290,000 tonnes of newsprint, improved newsprint, book grades and lightweight coated grades. Norske Skog Albury in NSW employs 185 staff and has an annual production capacity of around 274,000 tonnes – about 40% of the newsprint and related grades used in Australia each year.

Norske Skog Tasman at Kawerau in New Zealand has 160 employees. The manufacturer and supplier of directory, newsprint, improved newsprint and book paper products to NZ and international publishers and print media, produces up to 150,000 tonnes of paper each year.

‘Resolving the stalemate’: Sven Ombudstvedt, chairman, Norske Skog.

The transaction is expected to be completed in the second half of this year, subject to regulatory approvals in the countries concerned, including Australia and New Zealand.

“This is one of the most important milestones for the Norske Skog Group in recent years and concludes almost two years of relentless efforts and engagement to address the Norske Skog Group’s excessively levered capital structure,” said Sven Ombudstvedt, the chairman of Norske Skog. “Oceanwood’s decision to acquire a majority position in the secured bond and subsequently the decision to initiate a sales process proved to be the key to resolving the stalemate that was threatening the future of the operating business.”

John Chiang of Oceanwood, said: “Our first investment in Norske Skog was back in 2015 and we have supported and worked constructively with the group since. In November 2017, as it became apparent that it would be difficult to reach a consensual solution and solve the financial issues in the former Norske Skogindustrier holding structure, we decided to act to protect the operating companies. With the subsequent auction process now concluded, we are very excited to team up with Norske Skog’s management and employees. We share the ambition to see the new Norske Skog Group succeed and to realise the potential that we believe is inherent in the business as it continues to transform and grow.”

One Response to “Equity firm buys newsprint maker Norske Skog”

  1. May 09, 2018 at 1:47 pm,

    William Bell
    said:

    It makes you wonder how much longer printed newspapers can remain viable.

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