Stora Enso’s forest associate Bergvik Skog sells forestland in Latvia13 November 2018
Bergvik Skog AB, a Swedish forest holding company, has divested its ownership in its subsidiaries in Latvia where the company owned a total of 100,000 hectares of forestland.
Stora Enso owns currently 49.8% of Bergvik Skog. The transaction was finalised on November 13, with the selling price of assets €324m and the gain on disposal net of transaction costs and taxes totalling approximately SKr978m (€95m).
Stora Enso’s share of the gain is approximately SKr487m (€47m), subject to normal closing verification and currency movements. The total area in the Latvian forest is 111,000 ha, with 80,000 ha productive forestland.
The IFRS fair value of Bergvik Skog’s biological assets – growing trees –has increased, net of tax, approximately SKr1.3bn (€128m) compared to 2017. Stora Enso is in a process of restructuring its ownership in Bergvik Skog.
The divestment of the Latvian assets is part of the restructuring plan agreed among the shareholders. As a result of the planned restructuring, Stora Enso plans to transform its current ownership of 49.8% in Bergvik Skog, to a direct holding of approximately 70% of the value of the forest assets in Bergvik Väst.
The negotiations are progressing in accordance with the Letter of Intent signed in November 2017. The aim of the negotiations is to find a binding agreement leading to that the main restructuring can be finalised during the first half of 2019.
There are no negative effects expected on wood sourcing in 2019.