Displaying items by tag: Rottneros

Rottneros AB (publ) has reached an agreement to sell the CTMP equipment of the Utansjö Mill to BillerudKorsnäs.

“We are pleased that our CTMP equipment is a good fit within the large investment BillerudKorsnäs is making in Frövi and Rockhammar” says Carl-Johan Jonsson, CEO Rottneros

Rottneros’ business concept is to be an independent and flexible supplier of high-quality, customized pulp. This business concept is based on the success factors identified by the Board of Directors and management; namely, to be a company that solely concentrates on producing pulp and focuses on the requirements of its customers as well as niche ares and efficient production.

Business Concept

Rottneros' business concept is to be an independent and flexible supplier of customised and high-quality pulp. Rottneros adapts its product range to meet the needs and high expectations of customers by continuously developing its products and providing a high level of security of supply, technical support and service.

Vision

Rottneros shall be perceived as a market leader that is able to meet the needs and high expectations of pulp customers. This in turn shall result in stable profitability over the course of a business cycle set against the background of conditions within the industry.

For further information please contact:

Carl-Johan Jonsson, President and CEO Rottneros, phone +46 270-622 00

Rottneros discloses the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. The Information was submitted for publication on Friday, 10 October at 13:00 CET

Arctic Paper has given notice that they will vote against the proposed dividend of SEK 0.10 per share proposed by the Board of Directors at the Annual General Meeting. The reasons given are that Rottneros reported a loss and had a “... significant increase in Rottneros' indebtedness ..." in 2012.

Since the refinancing in 2009, Rottneros has during the period 2010 to 2012 invested SEK 333 million in its mills, entirely in accordance with the plan presented at that time, and following these substantial disbursements had a net cash flow of SEK -28 million after investments and tax but before dividends.

Profit after tax amounted to SEK 116 million for the corresponding period, excluding the one-off write-down in 2011, which had no effect on the company’s capacity to pay dividends. Dividends for 2010, 2011 and the proposed dividend for 2012 amount to SEK 60 million.

The Board of Directors of Rottneros are of the opinion that the proposed dividend presented is in line with the company's dividend policy and substantially justified and well-balanced, considering: the financial position of the company; the debt/equity ratio (i.e. the company’s liabilities in relation to equity), which amounted to 0.05 at the end of 2012; the equity/debt ratio, which amounted to 77 per cent; historical results and future earnings capacity; together with low reinvestment needs for years to come.

The proposed dividend corresponds to just over 1.5 per cent of the Group's equity and four per cent of the parent company's non-restricted equity.

The Board of Directors also notes that Arctic Paper’s main shareholder, Nemus, has voted in favour of the proposed dividend in previous years and also expressed a wish for a higher dividend than the dividend that the Board chose to propose. Nemus’ subsidiary Arctic Paper thus appears to have a different view than their main shareholder regarding how Rottneros’ results are to be appropriated over time.

Arctic Paper S.A. presented a public takeover bid to shareholders of Rottneros AB in November 2012. The acceptance period has since been extended and is now open until 26 February 2013. Arctic Paper controls 51.3 per cent of the shares in Rottneros as of 7 February 2013 and as a consequence of its takeover bid has requested that Rottneros convenes an extraordinary general meeting of the company to elect a Board of Directors.

The election of the Board is an item of business that would be dealt with at the AGM, together with the other usual AGM business, and the Board of Directors of Rottneros consequently proposed that the extraordinary general meeting requested should be substituted by bringing the AGM forward.. Arctic Paper has accepted this proposal.

Rottneros asked the Swedish Securities Council to consider whether this procedure, of bringing the AGM forward, complies with good stock market practice in this context. The Council has confirmed this to be the case.

The AGM will be held on Friday, 22 March 2013 at 14.00 CET in World Trade Center, Klarabergsviadukten 70, Plan 4, Section D, World Trade Center Conference, New York Room, Stockholm, Sweden.

A shareholder who wishes to have an item of business dealt with at the AGM shall, no later than 12.00 CET, 19 February 2013, present their proposal to the company so that it will be possible to include the matter in the notice convening the meeting and consequently deal it with at the AGM.

Notice convening the AGM will be published in accordance with the provisions of the Swedish Companies Act.

Tomas Hedström is leaving his post as Chief Financial Officer at Rottneros. He is taking up a corresponding position at PA Resources AB.

"Tomas Hedström has been employed by Rottneros since 2010. I wish to thank Tomas for the extraordinary contribution he has made to the company and at the same time wish him every success,” says Ole Terland, CEO and President of Rottneros.

The recruitment process has started.

1. Income after net financial items amounted to SEK 6 (-120) million for the full year 2012. The result for the previous year included total write-down and one-off costs of SEK -148 million.

2. Income after net financial items amounted to SEK 0 million for the fourth quarter of 2012 compared with a loss of SEK -44 million for the same quarter of the previous year. Cash flow from operating activities amounted to SEK 8 ( 22) million for the fourth quarter of 2012 and SEK 41 (35) million for the full year 2012.

3. The Board proposes a dividend of SEK 0.10 (0.10) per share for the financial year 2012.

4. Arctic Paper S.A. made a public takeover bid for all of the Rottneros shares in November; this offer has been extended to 4 February 2013 owing to poor support. Arctic Paper’s shareholding amounted to 39.4% of the total number of shares at the turn of the year.

5. A decision was made to continue production of groundwood pulp at Rottneros Mill.

CEO’s statement

The operating surplus (referred to internationally as ‘EBITDA’) amounted to SEK 61 million for the full year 2012. The corresponding figure for the previous year was SEK 97 million. The result after net financial items (EBT) was once more in the black at ‘zero’ for the fourth quarter of the year and SEK 6 million for the full year. This is not a great result, although we are pleased to have been able to produce a profit in a year that was tough for many pulp manufacturers. Those of us based in Sweden not only had to struggle with an increasingly weak global economy but were also subject to a very strong Swedish currency during the autumn.

Despite things not running smoothly throughout the world, the consumption of pulp rose by approximately three per cent, slightly more for softwood and slightly less for hardwood. The demand outlook for 2013 appears as though it will remain more or less the same. Prices, which increased during the first half of 2012, peaked at just over USD 850 per tonne to fall by around USD 100 per tonne during the summer and autumn and subsequently rise again to just over USD 800 per tonne by the end of the year. Global stocks fell during the autumn, particularly for softwood pulp, so that we are entering 2013 with some positive market momentum. Total global manufacturing capacity for softwood pulp will fall rather than rise in 2013 as several pulp mills are being built or converted for other grades. Together with the increase in demand, capacity utilisation is likely to increase, and price trends should therefore continue to rise.

Focusing specifically on Rottneros, we have during the year, successfully continued our move towards more sales within customer segments having specific requirements, where our raw materials and process equipment can prove their worth. This will reduce our exposure to the constrained and less specialised printing paper market. This applies to both mechanical and chemical pulp and is a development that we will continue in 2013. Our sales for different filter applications continue to increase slowly but surely. Deliveries to board manufacturers with an express requirement for bulk are steadily growing. The market for our customers within electrical applications has been tough, with a temporary reduction in infrastructure investments and consequently lower deliveries, which meant that our sales fell despite retaining market shares. On the cost side, both our variable and fixed costs have fallen. It was primarily the cost of timber that fell during the autumn, and then remained stable during the winter. All-in-all, comparing 2011 with 2012, variable costs per tonne reduced by almost ten per cent. The corresponding figure for fixed costs per tonne for Rottneros Mill is over ten per cent despite falling production, and slightly less than ten per cent for Vallvik Mill thanks to our annual production record of almost 209,000 tonne, of which we are proud. Rottneros Mill produced a small positive operating surplus for 2012 despite the ongoing programme of staff cuts. The cash flow after investments amounted to SEK 17 million. Vallvik Mill’s operating surplus is SEK 55 million and has exceeded SEK 350 million for the past three years. This surplus is being reinvested in the mill. We do not intend to provide this kind of mill-specific result on an ongoing basis, but consider it was justified to do so on this occasion as in the course of last year certain information appeared in the media that conveyed erroneous perceptions.

Arctic Paper SA announced in early November 2012 an offer to all of the Rottneros shareholders to exchange their shares in Rottneros AB for shares in Arctic Paper. The intention was to subsequently merge the companies. A large number of shareholders declined the offer, for which reason a merger of the companies did not take place. A merger of the companies – with one management team and one income statement/balance sheet – could have realised substantial synergies. Rottneros is now continuing as an independent company, though with a different shareholder structure, where the shareholding within the sphere of influence of the main owner company increased from 20% to 40% while virtually all of the bank shareholdings have been relinquished. As we are two independent companies, only transactions for the benefit of both parties and all shareholders will be concluded, that is to say as is the situation is at present and as it has been for many years. We will continue t o develop our ongoing business and further improve our supplier and customer relationships. Our doors are open to the discussion promised by Arctic Paper SA in respect of synergies, even without a merger. Any way of improving Rottneros is welcome.

In conclusion, I would like to express my appreciation for the significant shareholder support expressed both by telephone calls and by email in recent months.

(For full report, Download here)

The Rottneros Group has decided to continue to produce groundwood pulp at Rottneros Mill. The initiative to improve the groundwood mill's process has resulted in the mill producing and marketing a new grade with properties that are particularly attractive to board manufacturers.

There are plans to produce between 40,000 and 50,000 tonnes of groundwood pulp in 2013 and it will constitute the new board grade as well as current printing paper grades.

The Board of Rottneros announced in May 2012 that it had entered into negotiations concerning the termination of continuous groundwood pulp production at Rottneros Mill. Negotiations, which were concluded mid-year, resulted in the organisation having to reduce its staff by around 50 posts. Twenty or so employees are now being offered continued work.

Rottneros is with effect from 1 January 2013 increasing its sale prices for NBSK to USD 840 per tonne and for all CTMP qualities by EUR 20 per tonne. These price increases are justified considering the improved market outlook following cutbacks on the supply side occurring in Europe and lower stock levels combined with good overall growth in the global market.

Rottneros discloses the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. The Information was submitted for publication on Wednesday 19 December 2012 at 13.00 CET

On 7 November 2012 Arctic Paper S.A. announced its public offer to buy all of the shares in Rottneros AB. On the same day the Board of Directors of Rottneros recommended that the shareholders should accept the offer, subject to the conditions specified.

The Board of Directors of Rottneros has now been informed in writing by shareholders (including Skagen Vekst and Peter Gyllenhammar via companies, who taken together control more than 10 per cent of the capital and voting power in Rottneros), that these owners will not accept the bid announced by Arctic Paper.

In light of the above-mentioned new information - which means that Arctic Paper’s offer will not be accepted to such an extent that Arctic Paper would obtain over 90 percent and thereby be able to request the compulsory redemption of outstanding shares and consequently that a merger cannot be implemented - the Board of Directors of Rottneros makes the following comments.

The primary reason for the position adopted by the Board of Directors as referred to above is that a merger of the two companies may be expected to generate synergies of approximately SEK 80 million and also that, from the perspective of both results and cash flow, a merger would balance out the two companies' very strong dependency on fluctuations in pulp prices. A precondition for realising a substantial proportion of these synergies is that the companies are completely amalgamated and that one head office and one management group be phased out. In addition, synergies have been identified on the financial side, though this also presupposes that the companies join together. The other significant synergy comprises the optimisation of transport costs, which would probably be considerably more difficult to achieve if the companies continue to operate as autonomous businesses.

The Board of Directors’ recommendation remains unchanged, that is to say that the companies merge to enable these synergies to be realised. The fact that two major owners controlling more than 10 per cent of the capital and voting power have given notice that they will not accept the bid means in that event that a merger cannot be effected and that it would thus not be possible to secure most of these synergies.

This statement is made by the Board of Directors of Rottneros AB (publ) ("Rottneros" or the "Company") pursuant to the rules concerning public takeover offers on the stock market adopted by NASDAQ OMX Stockholm (the "Takeover Rules").

Arctic Paper S.A. ("Arctic Paper") has today, on 7 November 2012, announced a public offer to the shareholders in Rottneros to transfer all of their shares in Rottneros to Arctic Paper (the "Offer").

Arctic Paper offers 0.1872 newly issued Arctic Paper shares for each Rottneros share. The Offer values each Rottneros share to SEK 2.30 per share1 based on Arctic Paper's closing price on 6 November 2012, the last trading day prior to the announcement of the Offer.

In addition, Arctic Paper offers shareholders who as per 2 November 2012 held 2,000 shares or less in Rottneros a cash consideration of SEK 2.30 per share in Rottneros (the "Cash Offer"). For detailed terms and conditions regarding the Cash Offer, reference is made to Arctic Paper’s press release.

Arctic Paper is listed on the Warsaw Stock Exchange but will in relation to the Offer apply for a secondary listing on NASDAQ OMX Stockholm.

The Offer represents a premium of:

•  14.4 per cent compared to the last quoted price prior to the trading halt on 6 November 2012, of SEK 2.01 for the Rottneros share, the last trading day prior to the announcement of the Offer;
•  26.2 per cent compared to the volume weighted average price of SEK 1.82 for the Rottneros share during the last 30 calendar days up to and including 6 November 2012; and
•  27.3 per cent compared to the volume weighted average price of SEK 1.81 for the Rottneros share during the last 90 calendar days up to and including 6 November 2012.

The Offer values Rottneros at approximately SEK 351 million, based on 152,571,925 outstanding shares in Rottneros.

According to the preliminary timetable included in the press release in which the Offer was made public, the acceptance period is expected to run from around 22 November 2012 to around 12 December 2012.

Based on all shareholders in Rottneros accepting the Offer and no shareholders choosing to accept the Cash Offer, Rottneros shareholders will own 34 per cent of the shares in Arctic Paper after completion of the Offer.

Arctic Paper has for a longer period of time held discussions with the Board of Directors of Rottneros (the "Board") regarding a combination of the two companies. As part of this process, the Board has engaged Lenner & Partners as financial advisors and Setterwalls as legal advisors.

The Board has, upon request by Arctic Paper, allowed Arctic Paper to conduct a limited confirmatory due diligence in connection with the preparations of the announcement of the Offer. Arctic Paper has not received any non-public price-sensitive information regarding Rottneros.

Rottneros has conducted a limited confirmatory due diligence regarding Arctic Paper and Arctic Paper has informed Rottneros that no non-public price-sensitive information has been disclosed regarding Arctic Paper.

The Board’s Considerations

During 2008 and 2009 Rottneros went through an operational restructuring where the number of pulp mills was reduced from five to two. During 2009, a financial restructuring was performed in which the Company’s debt was reduced to zero. The ambition was to mitigate the Company’s high operational risk with a low financial risk and establish the preconditions for making necessary investments in the Vallvik Mill, and also to re-introduce dividends. The production capacity in the Vallvik Mill has since been expanded and dividends to shareholders have been re-introduced. The financial position is still sound, though Rottneros remains a rather small company with a market
capitalization of approximately SEK 300 million and net turnover of approximately SEK 1.5 billion. The Board has assessed several possible merger and acquisition opportunities during the last couple of years.

Considering the factors each shareholder has to take into account prior to their decision to accept, or not to accept, the Offer, the Board of Directors of Rottneros wish to make the following concluding comments:

•  A merger will result in both shareholder groups gaining the benefits of a significant reduction in the volatility of earnings and cash flows with ensuing lower operating risk. Over time, this should entail a lower cost of financing and a higher valuation of the shares.
•  The yearly synergies are estimated to be approximately SEK 80 million before tax and the costs to achieve these are rather limited. The estimated synergies are significant in relation to both companies’ current earnings. All things equal, this will substantially strengthen the new group’s future capacity for investments and dividends.
•  The Offer to Rottneros shareholders implies a not insignificant premium compared to the current share price, but most of all the Offer implies that Rottneros shareholders will own 34 per cent of the new group and through that will have a share in the value of the synergies described above.
•  For Rottneros shareholders the Offer represents an upstream integration in the value chain through them becoming owners of Arctic Paper’s current operations in fine graphic paper. In the view of the Board, this represents both a risk and an opportunity. It is a risk because the market for fine graphic paper is under a lot of pressure with limited or even declining growth. But it also means an opportunity to take part in developing one of Europe’s leading players in its field with a focus on bulky book paper and other paper products in the premium segment and with a presence in the growing Eastern European market.

For further information about the Offer, reference is made to Arctic Paper’s press release which was made public earlier today, and can be found at www.arcticpaper.com 

The Board’s Recommendation

Arctic Paper has for a longer period of time shown interest in a merger between Rottneros and Arctic Paper. The Board has been positive to the proposal as in the Board’s view – given the right terms and conditions – it provides the right preconditions to create value for Rottneros' shareholders and that it will be to the benefit of employees.

The discussions that have taken place with Arctic Paper have resulted in the offer Arctic Paper is announcing today to the shareholders of Rottneros, which the Board is presenting to Rottneros’ shareholders for their final decision.

The Board requests shareholders to carefully read the press release that Arctic Paper has made public today, as well as the Offer Document that Arctic Paper will make public on or around 21 November 2012, in advance of making their final decision.

The Board has considered what is in the best interest of all shareholders with respect to the Offer consideration, the current position of Rottneros, the future development of the Company and the associated possibilities and risks. As the consideration comprises shares in Arctic Paper, the prospects for the combined company have been evaluated in particular.

As part of this evaluation, the Board has in particular taken into account:

•  The premium the Offer implies for Rottneros’ shareholders;
•  That Arctic Paper is controlled by a shareholder holding 75 per cent of the shares, who is also the largest shareholder in Rottneros with a 20 per cent stake;
•  That Arctic Paper is a Polish company with a primary listing in Poland, but that Arctic Paper will have a secondary listing in Stockholm;
•  That the liquidity in the Arctic Paper share is rather limited at present;
•  The possibilities of realizing the estimated synergies; and
•  That Rottneros’ shareholders with 2,000 shares or less are offered a choice of receiving a cash consideration.

Based on the information that Rottneros has received from Arctic Paper and the information that has been included in Arctic Paper’s press release, the Board is of the opinion that the Offer will not involve any material changes to the future operations nor for the overall strategy of Rottneros’ production units, and that it will not involve any major changes for employees (including terms of employment). However, some administrative functions in these units may be coordinated with Arctic Paper’s units in Sweden. The operations at Rottneros’ head office will be coordinated with Arctic Paper’s units in Sweden and its head office in Poland, which will result in some limited redundancies.

The Board has been informed that Arctic Paper intends to offer certain individuals in the Rottneros management team an incentive arrangement, providing the Offer is completed. The payment is conditional upon the active participation of these key individuals in forming the new group and that they have not terminated their employment before 30 June 2013 and 31 December 2013, respectively. The incentive arrangement for all entitled employees amounts to a maximum of SEK 1.2 million in aggregate. The Board is of the opinion that the management incentive arrangement would be beneficial in relation to the shareholders’ interests and has thus approved Arctic Paper’s arrangement as well as its intention to offer this arrangement.

As part of the Board’s evaluation of the Offer and its recommendation, the Board has taken into account a fairness opinion from KPMG AB ("KPMG"). Rottneros engaged KPMG as an independent advisor to issue a fairness opinion on whether the Offer is deemed fair from a financial perspective. The Board has taken part of KPMG’s evaluation and its underlying materials.

KPMG has in its assignment, amongst other things, taken into consideration internal information from the management of both Arctic Paper and Rottneros concerning business descriptions, historical financial results, financial budgets and projections and other documentation. KPMG has also conducted interviews with the respective management teams of Arctic Paper and Rottneros and with the Chairman of the Board of Rottneros. KPMG has also conducted analyses of public information including competitors’ annual reports and general industry reports.

KPMG’s fairness opinion is attached to this press release and will also be published in the Offer Document.

KPMG’s opinion is that the Offer is to be considered fair for Rottneros’ shareholders from a financial perspective.

In conclusion, and based on the above, the Board of Directors of Rottneros unanimously recommends the shareholders of Rottneros to accept the Offer.

download the full release in pdf format

The Rottneros share was suspended from trading today, Tuesday 6 November 2012, at 10.14 on the initiative of NASDAQ OMX Stockholm. It is expected that further information will be provided before the stock exchange opens in the morning, Wednesday 7 November 2012.

Rottneros discloses the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. The Information was submitted for publication on Tuesday 6 November 2012 at 15.00 CET.