Powerflute Oyj Increase of shareholding in Harvestia Oy (8568N)

TIDMPOWR

RNS Number : 8568N

Powerflute Oyj

31 October 2016

31 October 2016

POWERFLUTE OYJ

Increase of shareholding in Harvestia Oy

Powerflute Oyj ("Powerflute" or the "Company") today announces that it has entered into a conditional agreement to purchase 47.4% of the shares of Harvestia Oy ("Harvestia"), the wood supply company in which it already has an interest of 47.4%, from Vapo Oy ("Vapo") for cash consideration of EUR1.1 million. The transaction remains conditional upon amongst other things receipt of clearances from relevant competition authorities and is currently expected to complete on 2 January 2017. Following completion of the transaction, Powerflute's interest in the issued share capital of Harvestia would increase from 47.4% to 94.7%, with the remaining shares held by Harvestia's senior management.

Harvestia is a wood supply company based in Finland, organising the procurement, harvesting and delivery of wood and other forest products to users in the paper, sawmill, energy and biofuel sectors. The company was established by Powerflute and Myllykoski Corporation in 2008 and has been under the joint control of Powerflute and Vapo since 2012. Harvestia takes full responsibility for all aspects of the wood supply chain, including negotiating procurement of wood from forest owners, harvesting operations, storing and management of wood inventories and delivery logistics. Harvestia is currently the sole supplier of wood to Powerflute's semi-chemical fluting mill in Kuopio, Finland.

For the year ended 31 December 2015, Harvestia generated revenues of EUR165.5 million, including sales of EUR33.4 million to Powerflute and sales of EUR63.0 million to Vapo. Its profit before taxation for the year was EUR0.4 million and at 31 December 2015 it had total net assets of EUR6.4 million. The contemplated transaction will have no impact on the financial results or financial position of Powerflute for the year ending 31 December 2016, but the results of Harvestia will be consolidated into those of Powerflute for the year ending 31 December 2017.

For further information, please contact:

 
 Powerflute 
  Dermot Smurfit (Chairman)                c/o Oliver Winters 
  Marco Casiraghi (CEO)                    FTI Consulting 
  David Walton (CFO)                       [phone] 
 Numis Securities 
  Mark Lander (Corporate Broking) 
  Andrew Holloway/Jamie Lillywhite 
  (Nominated Advisor)                      [phone] 
 FTI Consulting 
  Oliver Winters/Georgina Goodhew/Tom 
  Hufton                                 [phone] 
 

About Powerflute

Powerflute is a paper and packaging group quoted on the AIM market of the London Stock Exchange (Ticker: POWR) which seeks to acquire businesses with strong fundamentals whose performance can be improved through a combination of management focus and targeted investment.

The Group has two main activities; Packaging Papers which trades under the name Powerflute and operates a paper mill in Kuopio, Finland producing a specialised form of Nordic semi-chemical fluting used in the manufacture of high-performance corrugated board; and Coreboard and Cores, which trades under the name Corenso and is a leading international manufacturer of high performance coreboard and cores, with coreboard mills in the United States and Europe and a network of core producing facilities in Europe, North America and China.

Nordic semi-chemical fluting is made from locally sourced birch, and boxes manufactured using it demonstrate superior strength and moisture resistance and are used for transportation of fruit and vegetables, high-value industrial goods such as electrical appliances and automotive components. The Kuopio mill is one of only three suppliers of Nordic semi-chemical fluting in Europe.

Cores and coreboard are manufactured from recycled paper and are used for applications in paper, packaging, textiles, steel, aluminium and many other industries. Coreboard and cores produced by Corenso demonstrate superior strength and rigidity and are suitable for use in the most demanding applications.

For further information, please visit www.powerflute.com.

This information is provided by RNS

The company news service from the London Stock Exchange

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October 31, 2016 05:26 ET (09:26 GMT)