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H2 buys Norske Skog Parenco mill and recovered paper business

Norske Skog, a Dutch paper products firm, has sold its paper mill Parenco in Renkum and recovered paper business Reparco to H2 Equity Partners, and cash worth €30m is expected to be released from the deal.

H2 is expecting good growth opportunities for the mill, and will consider conversion of the mill to produce packaging paper subsequently.

According to the firm, the move forms part of the plans to reduce Norske Skog’s net debt.

Norske Skog president and CEO Sven Ombudstvedt said the sale aims at improving Norske Skog’s cash flow and financial position.

According to the firm, raw material from Reparco adds strategic value that is mainly driven by the substitution to higher quality magazine paper grades, yielding better prospects.

The sale is subject to merger control approval in the Netherlands, while Parenco and Reparco works councils have given a positive advice on the sale to H2.

H2 focuses on turnaround and growth investments in various medium-sized companies.