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Stora Enso wood producer to divest sawmills, forest operations in Russia

The sawmill sites are located in the Novgorod Region and Karelia

STOCKHOLM, April 25. /TASS/. The Finnish-Swedish wood products manufacturer Stora Enso has concluded an agreement on sale of its two sawmills in Russia, the company said in a press release on Monday.

"Stora Enso has entered into an agreement to divest its two sawmills in Russia. The company’s Nebolchi and Impilahti sawmills will be divested to local management. In addition, the divestment includes Stora Enso’s Russian forest operation which through its harvesting supplies wood to the sawmills," the press release said.

Due to the uncertainties in the Russian market, "local ownership and operation can provide a more sustainable long-term solution for these business operations and the employees working there," the company explained.

The sawmill sites are located in the Novgorod Region (the settlement of Nebolchi) and Karelia (the settlement of Impilahti) employing approximately 330 people. Their total annual capacity is 350,000 cubic meters of sawn timber, including 55,000 cubic meters of processed timber and 65,000 tonnes of pellets. Stora Enso’s Russian forest operations employs approximately 170 people and manages long-term harvesting rights for around 370,000 hectares.

The transaction is, pending necessary approvals, expected to be concluded in Q2 2022. "Due to decreased business prospects on these businesses, an impairment loss of 70 million euro has been recorded in the first quarter result. The additional loss on the transaction under IFRS will be approximately 60 million euro, consisting mainly of currency translation adjustments to be recorded at the closing date," the company noted.

Stora Enso announced on March 2, 2022, that it would stop all production and sales in Russia until further notice.

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