Christen Sveaas lost the «match» in Norske Skog as major shareholder( Photo: Wikipedia)

The group’s operational activities will continue in Norske Skog AS as normal with as little impact as possible from the bankruptcy proceedings of the above companies. The non-listed Norske Skog AS will be the new operating parent company of the Norske Skog group, and will continue the head office function that has been performed by Norske Skogindustrier ASA. Oceanwood Capital Management and Aker Capital AS intend “to form a new company (“Bidco”), which will bid in an auction process for the operating assets of the company, reports Nordic News in a summary of what has happened in Norske Skogindustrier the last years.

Decleared insolvent

News reports that the board of the parent company for Norway’s long-troubled forestry firm Norske Skog finally bowed to the chopping block on Tuesday. Their decision to declare Norske Skogindustrier AS insolvent and file for bankruptcy in an Oslo court is a «great disappointment,» not least for would-be saviour Christen Sveaas, but he and others stressed that operations at the company’s seven paper mills would continue as usual. The company said the paper mills are running well, have been generating profits and remain the debt-laden 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.

Hundred bidders

Newspaper Dagens Næringsliv (DN) reported just before the weekend that 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 .

File for bankruptcy

The decision by Norske Skog’s parent company to file for bankruptcy was all but forced by Oceanwood and Aker, but Sveaas and his allies had continued to search for an alternative. Sveaas has been Norske Skog’s largest shareholder, he was widely viewed as being able to save Norske Skog from bankruptcy and he’s been adverse to admitting defeat. In the end, there was no choice. The board’s decision to file for bankruptcy was said to be unanimous, and made after all members agreed there no longer was any «realistic opportunity» to recapitalize the company that took on way too much debt during an international expansion period that began in the 1990s. Oceanwood had informed the board it was not willing to support any voluntary recapitalization. Now Oceanwood’s unlisted subsidiary, Norske Skog AS, will effectively become the new operating parent company of the Norske Skog group, according to the company’s statement on Tuesday.

Sveaas himself stated that the bankruptcy process was not expected to have «any particular consequences for operations at Norske Skog’s seven paper mills.» No employees will lose their jobs, «operations will continue as normal, and all customers will continue to receive quality products from Norske Skog as before,» Sveaas said.

Bankruptcy Trustee

Oslo Byfogdembete (Oslo Bankruptcy Court) has on 19 December and 20 December 2017, appointed lawyer Tom Hugo Ottesen as bankruptcy trustee for the following companies: Norske Skogindustrier ASA, Norske Treindustrier AS, Norske Skog Holding AS, Lysaker Invest AS Norske Skog Eiendom AS. In addition to the bankruptcy filing of Norske Skogindustrier ASA on 19 December 2017, the board of directors of Norske Treindustrier AS, Lysaker Invest AS, Norske Skog Eiendom AS and Norske Skog Holding AS have filed for bankruptcy at Oslo Byfogdembete (Oslo bankruptcy court) Wednesday 20 December 2017.The deadline for claims to the bankruptcy trustee is set to 23 January 2018. See the enclosed court order from Oslo Byfogdembete.
Questions concerning the bankruptcy process and the bankruptcy estate must be addressed to the trustee, says Attorney Tom Hugo Ottesen Kvale advokatfirma DA Office in Oslo

Foxhill Letter to Norske Skog

Foxhill Capital Partners L.P. («Foxhill») informed as a holder of the 11.75% 22. december that they had concerns concerns regarding conflicts of interest of several of the parties involved, as well as the aggressive timetable set for the auction. Foxhill made the letter public to inform other SSN Holders of what it believes are serious defects in the company’s current proposal.Foxhill Capital Partners, LLC, Investment Manager to the Foxhill Opportunity Fund, L.P., is seeking out other minority holders of the Norske Skog AS 11.75% Senior Secured Notes(“SSN”) to address serious concerns regarding the recent press releases published by Norske
Skog on November 23, December 13 and December 19, 2017.

Support in october

All the major shareholder groups of Norske Skogindustrier ASA have indicated their strong support for the consensual recapitalization solution between the Unsecured Committee and the Senior Secured Noteholder Committee reached yesterday. Among the 20 largest shareholders, who control about 38 % of the total number of shares in Norske Skogindustrier ASA, there are already over 75 % support for the recapitalization proposal. At the last general meetings, there have been about 35 – 40 % attendance from the shareholders, where the largest shareholders would constitute more than 90 % of the votes

.-We are pleased to see that all known major shareholders will support the recapitalization transaction.said Mr. Christen Sveaas, chairman and the largest shareholder of Norske Skogindustrier ASA in the end of october.

Did a great job

Christian Wilhelm Rynning-Tønnesen was CEO of Norske Skog from 6 June 2006 to 2010. He was the Group Executive Vice President of Economics and Finance from 2005. He took over as CEO of Jan Oksum. Rynning-Tønnesen worked in Statkraft 1992-2005 and is today CEO in stately owned Statkraft. Finance Analytics Einar Kilde Evensen in DnB Nor Markets to E24 said the following when he left Norske Skog.

-Given the situation of Norske Skog, Rynning-Tønnesen may leave a company in great trouble, but Evensen believes the CEO has done a solid job since taking over the job in 2005.

-Following the conditions, Norske Skog has been well-run, where Rynning-Tønnesen has implemented several strategic measures, which include the sales of the Asian factories. Had these not been implemented, the situation in Norske Skog would have been considerably worse, says Kilde Evensen.The DnB Nor analyst receives support from Kenneth Sivertsen in Arctic Securities.

-Rynning-Tønnesen has done a good job in an extremely tough market and difficult situation for Norske Skog, said Arctic analyst to the norwegian net newspaper E24.

Former CEO Christian Rynning Thønnesen had a good reputation in Norske Skogindustrier ASA(Photo:Norske Skog)

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