MEMPHIS, Tenn., Oct. 8, 2015 /PRNewswire/ -- International Paper
(NYSE: IP) today announced that it has entered into a definitive
agreement with its Chinese coated board joint venture partner,
Shandong Sun Holding Group Co., Ltd., to sell its 55% equity
interest in the joint venture (IP-Sun JV). As consideration
for the sale, the Company will receive RMB
149 million (or approximately US$23
million) in cash. Additionally, the Company will
remove approximately $400 million of
currently outstanding debt from the Company's balance sheet, along
with the other assets and liabilities of the IP-Sun JV, following
completion of the transaction.
International Paper also announced today that it is pursuing
strategic options for its corrugated box business in China and South East
Asia and has signed a non-binding letter of intent with a
prospective buyer based in China.
"International Paper undertook a thorough review of its position
in serving the Chinese and Asian markets," said Mark Sutton, International Paper Chairman and
CEO. "The Company remains committed to serving these very important
markets, but concluded we could be more effective supplying this
region with globally competitive products primarily through our
Ilim joint venture in Russia and
from the U.S."
The IP-Sun JV transaction is expected to be completed within the
next six months, subject to satisfaction of closing conditions,
including obtaining required Chinese governmental approvals.
International Paper estimates the agreement to sell the Chinese
coated board joint venture, which started in 2006, will result in
net pre-tax noncash asset write-offs of approximately US$200 million to be recorded in the third
quarter of 2015.
The table below reflects the IP-Sun JV balance sheet as
consolidated in International Paper's balance sheet as of
September 30, 2015. The total
asset and liability amounts below will be classified as assets and
liabilities held for sale in IP's consolidated balance sheet as of
September 30, 2015. The IP-Sun
JV will be deconsolidated from International Paper's consolidated
balance sheet following the completion of the sale.
($
Millions)
|
Total Current
Assets
|
|
620
|
Plants, Properties
and Equipment, Net
|
|
479
|
Goodwill
|
|
117
|
Deferred Charges and
Other Assets
|
|
71
|
Subtotal
|
|
1,287
|
Impairment
Charge
|
|
(192)
|
TOTAL
ASSETS
|
|
$ 1,095
|
|
|
|
Payables and Other
Short-term Liabilities
|
|
$ 564
|
Debt
|
|
373
|
Other Long-term
Liabilities
|
|
6
|
Total
Liabilities
|
|
943
|
Shareholder's
Equity
|
|
56
|
Noncontrolling
Interest
|
|
96
|
Total
Equity
|
|
152
|
TOTAL LIABILITIES
AND EQUITY
|
|
$ 1,095
|
The IP-Sun JV has one manufacturing location in Shandong Province in China, which includes four paper machines and
approximately 1.4 million annual metric tons of coated board
capacity. International Paper's Industrial Packaging Asia business
has 18 corrugated box plants in China and South East
Asia and a workforce of approximately 3,000 employees.
International Paper (NYSE: IP) is a global leader in
packaging and paper with manufacturing operations in North America, Europe, Latin
America, Russia,
Asia and North Africa. Its businesses include
industrial and consumer packaging along with uncoated papers and
pulp. Headquartered in Memphis,
Tenn., the company employs approximately 58,000 people and
is strategically located in more than 24 countries serving
customers worldwide. International Paper net sales for 2014 were
$24 billion. For more information
about International Paper, its products and stewardship efforts,
visit internationalpaper.com.
Certain statements in this press release may be considered
forward-looking statements. These statements reflect Company
management's current views and are subject to risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied in these statements. Factors
which could cause actual results to differ include but are not
limited to (i) the execution of a definitive agreement to sell the
Company's corrugated box business in China and South East
Asia (ii) the receipt of regulatory approvals for the
transactions and the successful fulfillment or waiver of all other
closing conditions without unexpected delays or conditions;
(iii) the successful closing of the transactions within the
estimated timeframe; (iv) industry conditions; (v) global economic
conditions and political changes; and (vi) other factors that can
be found in the Company's press releases and Securities and
Exchange Commission filings. The Company undertakes no
obligation to publicly update any forward-looking statements,
whether as a result of new information, future events or
otherwise.
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SOURCE International Paper