Stora Sells Borneo Plantation to Raise Cash, Boost Earnings
Stora Sells Borneo Plantation to Raise Cash, Boost Earnings
Ville Heiskanen, Bloomberg
Stora Enso Oyj, the world's biggest papermaker, said it sold a plantation on the island of Borneo to raise cash for its main business. The disposal will have "a minor positive effect" on earnings, the Finnish company said.
Stora's majority stake in PT Finnantara Intiga was bought by Global Forest Ltd., a subsidiary of Indonesia's Sinar Mas Group, the Finnish company said in a PR newswire statement. The value of the plantation on Stora's books was US$26 million, it said, without disclosing details of the transaction.
Stora has been disposing of forest lands to free up cash for investment and boost earnings hurt by a decline in paper prices.
The company earlier this year transferred Swedish pine and spruce woodlands covering an area larger than Connecticut to a new company and sold a majority stake in the business.
"The decision to divest the interest in the Finnantara plantation is in line with the group's strategy of releasing capital in order to develop its core businesses," Helsinki- based Stora said in a statement on Thursday.
Shares of Stora were little changed at 11.15 euros as of 1:38 p.m. in Helsinki, for a market value of 9.37 billion euros ($11.52 billion). The stock has gained 4.4 percent this year.
The Finnantara site is located in the Indonesian province of West Kalimantan, Borneo, the statement said. About 12 percent of the forest's 299,700 hectares are planted for commercial use.
Stora sold the plantation after its strategic importance to the company decreased following a decision to build a pulp mill in Brazil and establish plantations in Guangxi, southern China, it said.
The Finnish company still owns plantations in Brazil, Portugal, China and Thailand. Forests in the latter three countries have a book value of 78.4 million euros. The Brazilian sites are owned by Veracel, a Stora associate, it said.
Sinar Mas Group, based in Jakarta, is owned by Indonesia's Widjaja family.