Finnish paper maker sells equity to Packages Ltd

LAHORE: Finnish paper and pulp manufacturer Stora Enso on Wednesday announced divestment of its 35 equity stake in a joint venture firm formed between Stora and Packages Limited against a cash consideration of six million Euros. 

Stora, in a statement, said it is focusing its strategy on delivering profitable growth.  “Due to a changing business environment in Pakistan, the Bulleh Shah Packaging asset with its product mix and related future outlook is a non-strategic fit in our consumer board roadmap,” it added. “Our focus is on high quality virgin-fibre products. We are committed to make a responsible divestment and intend to leave a positive contribution in the society.”

Bulleh Shah Packaging Ltd. – the joint venture between Stora and Packages Limited – was formed to provide packaging solutions in Pakistan.  Stora said the loss on disposal amounts in total (is equivalent) to approximately 19 million Euros. “The transaction is expected to be completed in the third quarter of 2017.”

With this transaction, Packages Ltd. will achieve full ownership of Bulleh Shah Packaging Ltd. Packages Ltd, in a notice to Pakistan Stock Exchange, said its board has resolved to buy 35 percent shares held by Stora Enso in Bulleh Packaging at a price of eight million dollars subject to certain adjustments.

“Consummation of the proposed transaction is subject to execution of a share purchase agreement and procurement of all applicable corporate and regulatory approvals and other customary transaction related conditions,” it added. 

Helsinki, Finland-headquartered Stora Enso will, however, carry on with the public private partnership with the International Labour Organisation to promote decent work and to combat child labour in Punjab until the end of 2018. 

Furthermore, the group will continue to support its share of the two community investment programmes it has been funding in Pakistan.    “At Stora Enso’s request, an independent third party, KPMG Sustainability Services, is advising Stora Enso on responsible exit from Pakistan,” Stora said in the statement.