Norske Skog entered into a loan agreement for a EUR 16 million liquidity facility with holders of a majority of the SSN (EUR 290 million, 2019) to support the group’s operating business throughout the recapitalization process.
According to the announcement, the newly elected board of directors of Norske Skog had invited key stakeholders in the recapitalization process for discussions this week. The board will thereafter continue the process to develop a recapitalization proposal which will address the group’s financial situation..
Lars P.S. Sperre, President and CEO of Norske Skog, commented:
“We are satisfied that the key stakeholders are willing to support our competitive business operations with a EUR 16 million liquidity facility. The liquidity facility and cash flow from operations will secure our operating business through the recapitalization process. We will now direct all of our efforts to develop a long-term sustainable recapitalization solution for the group.”
In order to ensure information parity among stakeholders ahead of the forthcoming discussions between the newly elected board and bond holder groups, Norske Skog disclosed that the most recent estimate for full year 2017 gross operating earnings is around NOK 700 million. The downward adjustment from earlier outlook statements is mainly due to adverse currency effects combined with higher energy cost and increased exports to lower-margin Asian markets. The negative currency effects alone represent a negative adjustment in excess of NOK 50 million.
Norske Skog launched a recapitalization transaction at the beginning of June 2016. It is expected to significantly reduce the group’s debt level and interest cost, increase the equity value, and position the company to deliver on its future growth strategy.
Earlier, Blackstone’s funds divested shares of Norske Skog.
About Norske Skog:
The company is a leading producer of newsprint and magazine paper. The company has 9 paper mills around the world.