Norske Skogindustrier AS was declared insolvent by the board of the parent company Norske Skog, at the end of 2017.
The company filed for bankruptcy in an Oslo court and is said that operations at the company’s seven paper mills would continue as usual.
According to the company, the paper mills are running well and have been generating profit, while the debt-laden remained the company’s greatest asset. Plans to sell them started moving forward last week after Norske Skog’s largest secured creditor, the Oceanwood Capital Management, withdrew support for any new recapitalization plan.
As reported, Oceanwood had instructed Citibank to begin the process for an auction of the plants. Around 100 potential bidders have already been identified.
It’s widely expected, though, that the plants will ultimately be bought up by Oceanwood and its new teammate Aker, the investment firm controlled by Norwegian industrialist Kjell Inge Røkke. They launched their own bid by teaming up last month, with a goal of acquiring the papermills cheaply and unburdened by debt, to eventually make up for their losses on loans to Norske Skog.
Christen Sveaas, Norske Skog’s largest shareholder, was said to be able to save the company from bankruptcy, but he had been advised to admitting defeat.
Now Oceanwood’s unlisted subsidiary, Norske Skog AS, will effectively become the new operating parent company of the Norske Skog group.