International Paper to sell its India business to West Coast Paper
30 May 2019
International Paper on Tuesday announced the signing of an agreement with West Coast Paper Mills Limited to sell its controlling interest in International Paper APPM Limited, an India-based paper business.
International Paper currently owns approximately 30 million shares, or 75 per cent of the outstanding shares, of International Paper APPM Limited (APPM).
Depending on the open offer, WCPM will acquire between 51-60 per cent of APPM’s shares at Rs275 per share from IP.
The deal, which is pursuant to regulatory approvals and an open offer, would be for around Rs660 crore in cash.
The stake will be acquired from existing promoters — International Paper Investments (Luxembourg), SARL Luxembourg and IP International Holdings Inc, US. The deal is expected to be completed by the end of the year, WCPM said in a regulatory filing.
APPM expects the transaction to be completed by the end of the year subject to satisfaction of customary closing conditions, including obtaining required governmental approvals and West Coast Paper Mills Limited's (WCPM) launch of a tender offer.
As required under Sebi takeover regulations, WCPM will launch a tender offer to acquire all of the outstanding shares of APPM that are owned by public shareholders, which represents 25 per cent of APPM's outstanding shares. The closing of IP's transaction with WCPM will occur following the completion of the tender offer and receipt of antitrust clearance. Depending on the results of that tender offer, WCPM will acquire from IP between 51 per cent and 60 per cent of the outstanding APPM shares at a price of Rs275 per share. Once this transaction closes, WCPM will be responsible for the operations of APPM, and International Paper will be a passive investor until such time that IP has sold its remaining shares in APPM.
"As part of our strategic assessment of the IP portfolio, we have decided to exit our position in IP APPM," said Mark Sutton, chairman and chief executive officer. "This decision is a reflection of our continued focus on growing our global packaging and cellulose fibers businesses. Our paper business continues to perform well in India and we wish the team there the very best in the future."
International Paper is a leading global producer of renewable fiber-based packaging, pulp and paper products with manufacturing operations in North America, Latin America, Europe, North Africa, India and Russia. The company produces corrugated packaging products, pulp for diapers, tissue and other personal hygiene products, besides paper used for education and communication purposes.
Based in Memphis, Tennessy, the company employs 53,000 people and serve more than 25,000 customers in 150 countries. It had net sales for of $23 billion in 2018.
The company had posted a turnover of Rs1,441.92 crore for the financial year ended 31 March 2019, up from Rs1,285.09 crore, recorded during the previous year-ago fiscal.