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.