Ilim Group and U.S. International Paper have officially agreed to set up a venture so that Ilim could emerge as the country’s biggest maker of paper, corrugated and coated board.
Photo: Nikolay Cyiganov
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U.S. International Paper to Boost Ilim to End Product
Ilim Group and U.S. International Paper have officially agreed to set up a venture, a half in which will cost $650 million to the U.S. company. Once emerged, the venture will upgrade facilities of Ilim and drive it up from the segment of log producers to the market of end product. Ilim is willing to spend $1.5 billion to emerge as the country’s biggest maker of paper, corrugated and coated board, which is comparable to today’s cost of the company.
Ilim Group and International Paper (IP) announced Friday they sealed a final agreement to set up a venture. IP undertook to buy out 50 percent of stocks of Swiss Ilim Holding S.A. for $650 million. The worth of the company is estimated at $1.6 billion less the debt burden. The deal was sanctioned by Federal Antimonopoly Service on June 6 and is expected to be closed by mid-fall.
According to informal data, today’s principal owner of Ilim Holding is Ilim Pulp CEO Zakhar Smushkin, while Boris Zingarevich and Mikhail Zingarevich are said to be his partners.
When getting ready for the deal, Ilim Holding acquired the stocks of Kotlass TsBK, Ust-Ilim LPK, Bratskcomplexholding, Tsellyulozno-Kartonny Kombinat (Pulp & Paper Enterprise), Ilim-Gofropak and St. Petersburg KPK.
The subsidiary of Ilim Holding – Ilim Group – was registered in September. In the next move, key production divisions of the group shifted to the single stock by merging into Ilim. The woodworking assets of the group will be consolidated separately and lay the basis for a holding focused on house building and finishing material.
Smushkin said he will spend $1.5 billion to upgrade the equipment of Ilim enterprises. Ilim won’t buy additional assets. Instead, it will build five makers of corrugated board. The first project of 1 billion rubles will be launched in the Leningrad region already this year.
www.kommersant.com
All the Article in Russian as of Aug. 20, 2007
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