(Reuters) -Finnish forestry group Stora Enso said on Wednesday it is divesting 12.4% of its Swedish forest holdings for an enterprise value of 900 million euros ($1.02 billion).
The divestiture is anticipated to reduce the group’s adjusted EBITDA by about 25 million euros per year and is expected to reduce net debt by 790 million euros, the company said.
Stora Enso will retain a 15% ownership interest in the new entity, while Soya Group will own 40.6% and a consortium led by MEAG, the asset manager for Munich Re of Germany, will hold a 44.4% stake.
The company and the divested entity will also enter into a 15-year wood supply agreement with a possible additional 15-year extension to secure wood availability for Stora Enso’s Swedish business units.
Stora Enso reported its divestment plans in October last year in a move to reduce debt and strengthen its balance sheet.
The company in April reported that its adjusted earnings before interest and taxes rose to 175 million euros in the first quarter, surpassing analysts’ 124.9 million euro forecast in a poll by Vara Research.
($1 = 0.8832 euros)
(Reporting by Devika Nair in Bengaluru; Editing by Vijay Kishore)
