Norwegian paper manufacturer Norske Skog is seeking to restructure its rapidly rising debt, which has now reached an eye watering €1bn.
The company, which has three of its seven paper mills in Australian and New Zealand, has suffered what it says is a tumultuous year, due to rapidly declining process in some of its main newsprint stocks, and the adverse currency effect of a retreating Norwegian krone.
Norske Skog’s Australian operations supply some 600,000 tonnes of stock into the local market, and produces paper for much of Asia. Its four European mills supply Europe and the rest of the world.
Norske Skog chief executive Sven Ombudstvedt put blame on the falling krone value and says the company needs to strengthen medium-term capital through the restructuring.
“The sharp weakening of the Norwegian krone has increased the net interest bearing debt and squeezed our book equity to an unacceptable level,” he says.
Challenging business: Norske Skog’s Boyer mill
The firm says they want to persuade holders of senior loan notes to switch to new unsecured notes that mature in 2019, and to amend the terms of other existing notes that mature between 2016 and 2023.
Ombudstvedt says the attempts to de-leverage will protect finance for the company’s stakeholders, and will contribute to improvements in next year’s profitability
“If the transaction is successfully completed, we can avoid a comprehensive balance sheet restructuring in the foreseeable future,” he says.
“We believe that the successful completion of the transaction will protect value for all our stakeholders.”
