Following Final Investment Decisions in the second quarter this year,Norske Skog has now entered into debt facility agreements with an aggregate amount ofEUR 265 million to finance itsEUR 350 million investment in recycled containerboard conversion projects. Lenders are leading European banks, partly guaranteed by German export credit agencyEuler Hermes andAustria Wirtschaftsservice Gesellschaft - theAustrian Government Promotional and Investment Bank . The commercial terms are attractive and support the highly competitive profile of the containerboard projects. The first containerboard production will commence in Bruck in just over a year and putNorske Skog on the path to become the leading European independent producer of recycled containerboard. - "We announced our strategic move into packaging production in June last year and took the Final Investment Decisions for our packaging projects in April and June this year. Today, we announce the signing of highly attractive financing arrangements for both projects, adding another important milestone on the path to become a leading packaging company. We are happy to see strong support from existing and new relationship banks to realise our ambitions. The quality of the financings arrangements and all involved parties speak to the attractive profitability and relatively low risk profile of the conversion projects", saysSven Ombudstvedt , CEO ofNorske Skog . The total financing amounts toEUR 265 million , or approximately 75% of theEUR 350 million investment amount, of whichEUR 193 million is for the Golbey containerboard project andEUR 72 million for the Bruck containerboard project. DNB, Caisse d'Epargne Grand Est Europe andNatixis acted as Joint Mandated Lead Arrangers (MLA) for the financing in Golbey, and Raiffeisenlandesbank OÖ and IKB Deutsche Industriebank acted as MLAs for the financing in Bruck. The facilities will be drawn as capex is incurred, and repayment is scheduled and expected to commence approximately upon completion of each respective project with average maturity towards the end of 2030. Utilisations are subject to customary conditions precedent for such facilities. The debt financing ofEUR 265 million is expected to increaseNorske Skog's annual interest costs with approximatelyEUR 5 million annually once fully drawn. Production of containerboard will commence during the fourth quarter of 2022 at the Bruck industrial site and during the fourth quarter of 2023 at the Golbey industrial site. The machines are expected to operate at 60-70% utilisation in the first year and reach full utilisation during the third year of production. Once at full utilisation, the machines are expected to generate annual EBITDA ofEUR 70-80 million annually, based on historical prices and margins seen in the market. In combination with the issuance of equity ofNOK 400 million in January this year, the issuance of theEUR 150 million bond and the establishment of theEUR 31 million RCF in February this year,Norske Skog has now established a solid financial platform for the containerboard projects. This marks an important milestone inNorske Skog's strategic transition into growing and high margin markets. Together with the +400 GWh Waste-to-Energy facility at Bruck, due for start-up in six months, the start of containerboard production in just over a year will provide a material shift inNorske Skog's income sources, enabling a long-term sustainable earnings profile. AboutNorske Skog Norske Skog is a world leading producer of publication paper with strong market positions and customer relations mainly inEurope andAustralasia . TheNorske Skog Group operates four mills inEurope , two of which will produce recycled containerboard following ongoing conversion projects. In addition, the Group operates one paper mill inAustralia and a wood pellets facility inNew Zealand .Norske Skog aims to further diversify its operations and continue its transformation into a growing and high-margin business through a range of promising energy and fibre development projects. The Group has approximately 2 150 employees, is headquartered inNorway and listed on theOslo Stock Exchange under the ticker NSKOG.Norske Skog Communications and Public Affairs For further information:Norske Skog media: Vice President Communication and Public AffairsCarsten Dybevig Email: carsten.dybevig@norskeskog.com Mob: +47 917 63 117Norske Skog investor relations: Investor Relations Manager EvenLund Email: even.lund@norskeskog.com Mob: +47 906 12 919
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