Oceanwood has entered into a sale and purchase agreement (the SPA*) to buy the entire issued share capital of Norske Skog AS (Norske Skog). Following a four-month competitive auction process, in which more than 100 prospective bidders were approached, Oceanwood emerged as the winning bidder by offering the highest value in cash for the shares and the intercompany loans.
John Chiang, an Investment Adviser of Oceanwood, says: “Our first investment in Norske Skog was back in 2015 and we have supported and worked constructively with the group since. In November 2017, as it became apparent that it would be difficult to reach a consensual solution and solve the financial issues in the former Norske Skogindustrier holding structure, we decided to act to protect the operating companies. With the subsequent auction process now concluded, we are very excited to team up with Norske Skog’s management and employees. We share the ambition to see the new Norske Skog Group succeed and to realise the potential that we believe is inherent in the business as it continues to transform and grow.”
The acquisition is subject to Oceanwood obtaining the relevant antitrust and other regulatory approvals in the countries concerned, including Australia and New Zealand, which is currently anticipated to take between four and six months to obtain.
Sven Ombudstvedt, the chairman of the board of Norske Skog AS, says: “This is one of the most important milestones for the Norske Skog Group in recent years. It concludes almost two years of relentless efforts and engagement to address the Norske Skog Group’s excessively levered capital structure. Oceanwood’s decision to acquire a majority position in the secured bond and subsequently the decision to initiate a sales process proved to be the key to resolving the stalemate that was threatening the future of the operating business.”
The board and management of Norske Skogindustrier ASA initiated the process of addressing its unsustainable capital structure in October 2016 with representatives of its secured and unsecured financial creditors. Despite lengthy and constructive negotiations, the creditors and the shareholders did not reach any consensual capital restructuring solution. The board of Norske Skogindustrier ASA filed for bankruptcy in December 2017.
Lars P. S. Sperre, the President and CEO of Norske Skog says: With Oceanwood as a financially strong new owner, the Norske Skog Group and our employees now have a unique opportunity to further develop a sustainable business platform capable of strengthening our core business and investing in promising new growth projects. We would sincerely like to thank our customers, suppliers and employees who have demonstrated a tremendous amount of trust and support throughout this process, and we look forward to continuing to work with all of you in the future.”