OSLO, Norway, Dec. 15, 2016 (Press Release) -Norske Skog has entered into an unconditional agreement to sell the Topp1 power station at the Tasman mill site in New Zealand to NGATI Tuwharetoa Electricity Ltd, a local partner at the Tasman industrial site.
Topp1 generates around 21.5 MW geothermal energy annually. The net sales proceeds are close to Norske Skog's carrying value, which will reduce net debt and terminate the transaction financing with GSO and Cyrus. The transaction will thus have limited accounting effects. The transaction will be completed on or about 16 December 2016.
We are very pleased with this sales transaction. Through the sale of the Topp1 plant, we are reducing our long-term energy exposure for the Tasman mill in New Zealand. The electric power generated by Topp1 has been surplus to our requirements following the closure of a newsprint machine at Tasman in 2013. Sale of non-core assets will still be a source for growth investments. In 2020, we are targeting 25% of our gross operating earnings to be generated from non-publication paper activities, says Sven Ombudstvedt, President and CEO of Norske Skog.
Norske Skog has also agreed to extend, from 30 November 2016 to 30 March 2017, the EUR 10 million short-term facility with funds managed by GSO Capital Partners and Cyrus Capital Partners. The facility is issued by Norske Skog AS and is guaranteed by Norske Skogindustrier ASA, Norske Skog Saugbrugs AS and Norske Skog Skogn AS.