Spain’s Ence – Energía y Celulosa - has agreed to sells its forestry assets in Uruguay to a company in this country, owned by a prestigious U.S. institutional fund with forestry operations in Latin America. The assets sold are made up of 27,780 hectares of forest land with eucalyptus plantations in the southwest of Uruguay, as well as sawmills and woodchip plants.
Ence will receive USD 77.3 million from the sale of the related land and assets. The transaction requires the approval or the Uruguayan authorities.
The agreement represents an important step in Ence’s forest supply strategy, which focuses on evolving from owner to forest manager, and which will enable the company to benefit from a more focused and competitive access to the wood on the Iberian Peninsula.
"The transaction allows us to continue the financial strengthening of Ence, which already had before this operation a very low level of debt of 1.2 times EBITDA” said Ignacio de Colmenares, the CEO of Ence.
The disintermediation strategy carried out by Ence in purchasing wood on the Iberian Peninsula has enabled the company to access significant volumes of forests in Spain that neither the company nor the sector has been able to access until now. As a consequence, Ence defined that the 27,780 hectares in Uruguay were not strategic, and their sale will enable the company to generate value from this divestment and to strengthen its solvency and financial profile, improving the current low level of Ence’s debt, reference in its industry.
In addition, it should be noted that with the agreement entered into, Ence will reinforce its operations and activities in the Spanish forest sector which will yield profit, generate employment and encourage economic development in the forest sector in the peninsula.
