Fortress Paper has entered into a purchase agreement for the sale and leaseback of its lands and buildings related to the company’s security paper business in Landqart, Switzerland.
The lands and buildings are being sold to a Swiss investment fund for an aggregate purchase price of CHF 44,500,000 (approximately $59 million).
The transaction is expected to be complete prior to July 21, 2016. Net proceeds are expected to be used to repay the company’s convertible debentures and for general corporate purposes.
Yvon Pelletier, president and CEO of Fortress Paper, commented that the sale and leaseback represents an excellent opportunity for Fortress Paper to enhance its balance sheet and improve its financial flexibility. “We remain excited about the future prospects of the Landqart Mill as we continue to focus on improving operations and expanding market share for our promising new Durasafe substrate,” he added.
Chadwick Wasilenkoff about the project
Chadwick Wasilenkoff, executive chairman of Fortress Paper, said the transaction “represents the culmination of a legacy project that is consistent with the company’s strategy of unlocking intrinsic value.”
“With renewed financial flexibility, the company will be able to pursue additional value creating alternatives, including implementing high return capital projects and expanding our portfolio of growth companies.”
In addition to the Landqart security papers business, Fortress Paper operates a dissolving pulp mill in Quebec.