International Paper recently 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, International Paper will receive RMB 149 million (or approximately US$23 million) in cash.
Additionally, International Paper will remove approximately $400 million of currently outstanding debt from its balance sheet, along with the other assets and liabilities of the IP-Sun JV, following completion of the transaction.
International Paper also announced 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.
