West Fraser up on plan to sell Hinton Pulp in Alberta
10/07/2023 15:45
** Shares of forestry company West Fraser Timber Co Ltd
WFG.TO up 1.5% at C$113.99
** WFG to sell its unbleached softwood kraft pulp mill in
Hinton, Alberta to packaging and paper firm Mondi Group Plc
** West Fraser says it will continue to supply fiber to the
Hinton mill under long-term contract, via residuals from Alberta
sawmills
** Estimated carrying value of assets and liabilities being
disposed of was $115 mln and $111 mln as of Dec. 31, 2022 and
March 31, 2023, respectively
** WFG expects to record a significant impairment loss in
connection with the sale
** "Pulp is not a meaningful part of WFG's business (lumber
and oriented strand board at the core) and, at times, can be an
unwanted distraction to the financials and operations" - Andrew
Kuske, Credit Suisse analyst
** Mondi intends, subject to pre-engineering and permitting,
to invest 400 mln euros ($439.00 mln) in the expansion of Hinton
mill, primarily for a new 200,000 tonne per annum kraft paper
machine, anticipated to be operational from second half of 2027
** WFG up 16% so far this year
($1 = 0.9112 euros)
(Reporting by Arunima Kumar in Bengaluru)
((Arunima.Kumar@thomsonreuters.com; Twitter: https://twitter.com/Aru_Kumar94
;))