Powerflute divests Scheufelen

Powerflute has agreed to divest its interests in Papierfabrik Scheufelen, which represents Powerflute’s entire coated woodfree and graphic papers business segment, to Paper Excellence BV, a privately owned pulp and paper producer. The total consideration is 38.5 million Euros, comprising cash consideration of 32.5 million and the assumption of 6.0 million of debt by Paper Excellence.Commenting on the deal, Dermot Smurfit, Chairman of Powerflute said: “We believe this represents a successful outcome for both the customers and employees of Scheufelen and forPowerflute’s shareholders. Scheufelen will benefit as part of an integrated pulp and paper group and will continue to prosper under new ownership.””Powerflute has achieved a significant return on its investment in a little over two years – a strong validation of our business strategy. On completion of the disposal, Powerflute will be debt free on a net basis and will have the capital structure and resources to continue to pursue its strategy of seeking opportunities to acquire underperforming businesses in the paper and packaging sectors,” Dermot Smurfit continued.After the divestment of Scheufelen, Powerflute’s only mill is the Savon Sellu mill in Finland.Papierfabrik Scheufelen was acquired by Powerflute in January 2009. During two years of ownership by Powerflute, good progress has been made with improving performance and restoring profitability, Powerflute writes in a press release.