Sappi has reached an agreement to sell its Belgium-based subsidiary Sappi Lanaken for €50 million (R980.6m) to UTB Waalwijk, following a decision to reduce production capacity for graphic paper in Europe.
UTB is a privately-owned Dutch company specialising in industrial property conversions.
In terms of the agreement, UTB will acquire all the shares in Sappi Lanaken, including all its assets for a value of €50m, of which €40m will be paid in cash. The transaction was expected to close in October, 2024.
Sappi announced in November it would begin a consultation process to close the Sappi Lanaken mill. The consultation process was successfully concluded and production at the mill ceased at the end of December, 2023.
Once the mill was closed, a process started to sell the land and assets. In the quarter to March 31, 2024 Sappi’s integrated paper and pulp mill in Germany, the Stockstadt mill was also closed.
In that three-month period – the second quarter of the group’s financial year – Sappi’s earnings before interest tax depreciation and amortisation (Ebitda) increased to $183 million (R3.3 billion) from $167m at the same time the year before. Net debt reduced to $1.34bn from $1.23bn.
The increase in Ebitda was mainly due to an improvement from the pulp segment and cost-savings, which included a 9% reduction in cash-fixed costs following the closures of the Stockstadt and Lanaken mills.
BUSINESS REPORT