Worried about Norske Skog crisis solution

Norske Skog Oslo BankruptcyNorske Skog, Headquarters in Oslo. Photo: Norske Skog

The forest industry worried about Norske Skog crisis solution

The crisis solution for debt-burdened Norske Skog (Norwegian Forests) reduces Norwegian ownership significantly. This makes the forest industry worried.

 

Today’s shareholders will be left with only 2 per cent of the shares in the company if the proposal goes through.

– The Norwegian ownership will be drastically reduced, says Christen Sveaas, the largest shareholder and chairman of Norske Skog, to Klassekampen.

The flagging out on the ownership side is a concern for Norwegian forest owners.

– It will be a heavily dominated by foreign financial investors. We primarily want industrial owners and owners with a national anchorage, says Erik Lahnstein, director of the Norwegian Forestry Association.

Lahnstein emphasizes that he is in favor of the proposal, but believes it is important that Norwegian owners gain greater ownership in the future. He hopes the Government will deliver on promises to establish a tax credit scheme for forest owners who aim for industrial purposes:

– The Government has announced that they will facilitate stronger ownership commitment to the Norwegian forest industry. If they do so, we think it will be possible to raise hundreds of millions that can be used to buy back parts of the group to Norway.

Expert believes creditors will accept Norske Skog’s crisis proposal

Professor at the Norwegian Trade High School (NHH) believes the creditors will accept the rescue package from Norske Skog.

– I think they are forced to accept the rescue package because the option is so much worse. But it’s a bitter pill to swallow for the current shareholders and a risk for the creditors, because in the long term, because there is no knowing if the project is profitable, says Professor Ola Honningdal Grytten to Klassekampen.

Norske Skog’s proposal is that NOK six billion of the total debt of NOK nine billion will be converted into shares issued to the creditors.

Grytten believes the company should look into which countries it is going to do business in, and warns Norwegian employees against taking their jobs for granted.

– Norway is not a low-cost country, and not the cheapest country to produce in. It is therefore not certain that this plan saves Norwegian industrial workplaces, says Grytten.

Norske Skog has about 2,500 employees. In Norway, the company has about 370 employees in Skogn and about 500 in Halden.

 

© NTB Scanpix / Norway Today

 

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