Sappi to sell its 34% stake in JV Jiangxi Chenming Paper to Shandong Chenming Paper for US$41.58M as part of new strategic focus
August 8, 2012
– Sappi Limited concluded an agreement to sell its entire 34% shareholding in the Jiangxi Chenming Paper Company Limited (JXCM), situated in Nanchang City, Jiangxi Province, China, for US$ 41,58m to the Shandong Chenming Paper Holding Company.
In 2004 Sappi joined a Joint Venture (JV) created by Shandong Chenming Paper Holding Company and other partners to explore fine paper opportunities in China. A change in strategic focus by Sappi caused this investment to be reviewed and led to discussions with the Shandong Chenming Paper Holding Company, the majority shareholder and co-founding partner of the Joint Venture. The parties have been able to reach an amicable agreement which will allow Sappi to concentrate on its strategy of investing in high growth businesses, disposing of non-core assets and reducing its debt.
Commenting on the decision Sappi CEO Ralph Boettger said: “Our Joint Venture in China has been of tremendous value to Sappi. We have gained a better understanding of the Chinese market as well as of manufacturing in China. We have built strong relationships with our Chinese partners and look forward to again working with them in the future. Sappi will remain active in China in particular through its release paper and chemical cellulose businesses.”
The implementation of the transaction is subject to various Chinese regulatory approvals, which it is anticipated will be achieved before Sappi’s financial year end on 30 September 2012.