Norske Skog Seeks Credit Line to Replace $92 Million Debt Deal
Norske Skogindustrier ASA (NSG), Europe’s third-largest maker of newsprint, is in talks with lenders to replace a 70 million-euro ($92 million) credit line, according to Sven Ombudstvedt, its chief executive officer.
Nordic banks are “supportive” as the company seeks to replace the debt, Ombudstvedt said in an interview in Oslo. The existing loan will be canceled at the end of September, the paper maker said today.
The company has been cutting costs and curbing capacity as it seeks to cut its 6.6 billion-krone ($1.1 billion) debt burden amid waning demand for newspapers and growing competition from online media. Lenders agreed to relax the terms on the credit line earlier this year at the same time as cutting the size of the facility from 140 million euros, according to a statement on its website.
The company plans to reduce leverage and improve margins to help it manage upcoming debt maturities, Ombudstvedt said. It plans to sell assets in Brazil and Asia in the next two years to boost liquidity and help reduce debt, he said. The Lysaker, Norway-based business sold a 51 stake in a Brazilian mill last month for $41 million.
The company has 1.7 billion kroner of debt maturing before the end of 2014 and about 1.6 billion kroner of cash, according to a statement published today. Earnings before interest, taxes, depreciation and amortization rose to 214 million kroner for the second quarter of the year from 174 million kroner in the first quarter.
Shares in Norske Skog gained 6.7 percent to 3.04 kroner at 3:05 p.m. in Oslo, the highest since April 9.
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