Best of British for Norkse's future

PAPERMAKER Norkse Skog has a likely new owner after a debt crisis led to the Norwegian forest products company filing for bankruptcy last December and putting itself up for sale by auction. The company's biggest creditor has this week emerged as the buyer.

London-based investment firm Oceanwood has agreed to buy Norske Skog, which presently operates four paper mills in Europe and three in Australasia, having sold or closed a number of factories in Asia and the Americas in the last 10 years. Oceanwood made its first investment in Norske Skog in 2015.

"We are very excited to team up with Norske Skog’s management and employees," Oceanwood spokesman John Chiang said at the weekend. "We share the ambition to see the new Norske Skog Group succeed and to realise the potential that we believe is inherent in the business as it continues to transform and grow.”

Norske Skog president and CEO Lars Sperre described Oceanwood as a financially strong new owner. "The Norske Skog Group and our employees now have a unique opportunity to further develop a sustainable business platform capable of strengthening our core business and investing in promising new growth projects," Mr Sperre said. "We would sincerely like to thank our customers, suppliers and employees who have demonstrated a tremendous amount of trust and support throughout this process, and we look forward to continuing to work with all of you in the future."

Established in Norway in 1962, Norske Skog arrived in the Australasian market in 2000 when it purchased the Canadian-based Fletcher Challenge and its subsidiary Australian Newsprint Mills, including the Boyer mill near New Norfolk.

The takeover by Oceanwood is subject to regulatory approval in several markets including Australia and New Zealand. After various adjustments, Oceanwood's cash offer will be about $374 million for Norske Skog, which generated revenue of $1.9 billion in the 12 months to March 2018.