11th May 2007 08:00
Powerflute Oyj11 May 2007 11 May, 2007 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN POWERFLUTE OYJ ADMISSION AND COMMENCEMENT OF DEALINGS ON AIM Powerflute Oyj (the "Company" or "Powerflute"), which operates a paper mill inFinland, and manufactures high quality nordic semi-chem fluting, is pleased toannounce that its shares have been admitted to trading on AIM, a market operatedby London Stock Exchange plc ("AIM"). Dealings in the shares commenced today at08.00 a.m. under the ticker symbol POWR. In total, 88,000,000 shares in theCompany of no par value have been admitted to AIM. A placing has been completed of 44,000,000 of Powerflute's existing shares (the"Placing") representing 50 per cent. of the Company's issued share capital. Theplacing price was set at 110 pence per share which implies a marketcapitalisation of £96.8 million. Collins Stewart Europe Limited is acting as Nominated Adviser and Broker to theCompany. E Ohman J:or Securities Finland Ltd also acted as a placing agent inFinland and Scandinavia on behalf of the Company and the selling shareholders inrelation to the Placing. • Powerflute is a holding company which, through its wholly-ownedsubsidiary Savon Sellu Oy (together the "Group"), operates a 300,000 tonne perannum rated capacity paper mill (the "Mill") near Kuopio, Finland, andmanufactures a specialised high quality grade of fluting called nordic semi-chemfluting. The Group is one of only three producers of nordic semi-chem fluting(sold by the Group as "PowerfluteTM") in the world. • The fluting is made primarily from birch wood sourced from Finland andRussia and is used mainly to manufacture boxes for fresh and frozen produce.Other applications include the packaging of electrical goods and agriculturalproducts and heavy duty packaging for automotive products. • The nordic semi-chem fluting product has certain key advantages overother corrugated case materials and other types of packaging: O Better crush resistance - which means that it has improved load bearingand stacking ability. O Capability to retain a high proportion of its crush resistance in highhumidity conditions. O The product is clean and hygienic, making corrugated boxes better totransport perishable foodstuffs such as fresh fruit and vegetables as comparedto wooden boxes. O Corrugated boxes are preferred by the fruit and vegetable sector overreturnable plastic crates ("RPCs"), particularly in the long distancetransportation market, because RPCs require collection and shipping and arecostly to return after use. • The Group's key customers comprise corrugated board and packagingmanufacturers. The majority of the Group's sales are in Western and SouthernEurope with Spain, Italy, Turkey and Greece accounting for approximately 50 percent of the total sales in 2006. Asia is also a significant market for theGroup, representing approximately 17 per cent. of annual sales for the financialperiod ended 31 December 2006. In 2006, the Group commenced sales to the USmarket. • The Group operates in an attractive segment of the corrugated casematerials market. Demand for corrugated board has grown and continues to do sodriven by the growth in long distance and international trade. • The Group has a highly experienced board and management team withconsiderable sector expertise at the highest level: O Dermot Francis Smurfit, Chairman - has had a long career in the pulp andpaper industry, stretching over 4 decades. He was latterly deputy chairman ofJefferson Smurfit Group PLC and world-wide sales and marketing director for thatgroup which at that time manufactured over 7.5 million tonnes of paper in 25countries. He has held a variety of operational posts in his career, having beenChairman of Smurfit Europe, where he was responsible for more than 15 papermills and 45 corrugating box plants. O Donald (Don) William Coates, CEO - worked for DS Smith plc from 1991 to2006, and from 2000 was CEO of its paper division, St Regis Paper CompanyLimited. During his time with DS Smith he handled acquisitions, ran paper millsand box plants and, as CEO of St Regis, undertook a number of strategicinitiatives, including the successful development of new products and therationalisation of the St Regis business. Don is a Chartered Accountant and wasPresident of the UK Paper Federation and UK representative on the Council of theConfederation of European Paper Industries between 2003 and 2005. O Ian McMillan Halliday, Corporate Development Director - the former CEO ofthe Group, who led its turnaround between January 2005 and December 2006. Ianwas Manufacturing Director of Mondi Paper Group and a key board director of thatcompany from 1988 until 1992. He held a senior management position in theJefferson Smurfit Group in Spain and Austria from 1993 until 1996 and in 1997/98led the turnaround of the Fletcher Challenge New Thames operation at UK Paper. O Christopher John Knight, non-executive Director - was an investmentbanker for nearly thirty years with Morgan Grenfell. O Juha Antti Niemela, non-executive Director - former CEO of United PaperMills, one of the world's leading forest product groups. O William (Tony) Smith, non-executive Director - former CEO of SmurfitPaper, Board & Reclamation Division (UK & Ireland). • Since the acquisition of the Mill by the Group, production volumeshave improved from 223,000 tonnes of product in 2004 to approximately 254,000tonnes in 2006. The Group's management achieved the turnaround through a culturechange, improved efficiencies and reduced costs, improvement of customerpricing, supplier terms and financial management. • The Group has a clear growth strategy: O organic growth through consolidating and, where possible, extending itsstrong market position in Europe by leveraging the Group's relationships withits existing customers and enhancing its profitability by maximising synergiesand optimising the cost base; O acquisition led growth in paper and paper conversion assets O focussing on cash flow and returns on investment and maintaining anefficient capital structure in order to maximise shareholder returns. Commenting on the announcement Powerflute's Chairman Dermot Smurfit said: "We are pleased to be admitted to AIM. It will enable us to take our existingbusiness to the next level and will give us a currency to make furtheracquisitions in the broader paper and paper based packaging markets." - ENDS - For additional information please contact: Financial Dynamics:Jonathon Brill +44 (0)20 7269 7170Billy Clegg +44 (0)20 7269 7157Ekaterina Alferova +44 (0)20 7269 7257 Legal Notice This announcement has been issued by the Company in connection with the Placingand the application for admission of the Company's shares to trading on AIM. All shares having been sold, this announcement does not constitute, or form partof, the Placing or any offer or invitation to sell or issue, or any solicitationof any offer to purchase or subscribe for any shares in any jurisdiction, norshall this announcement or any part of it, or the fact of its distribution, formthe basis of, or be relied upon in connection with, or act as an inducement toenter into, any contract or commitment whatsoever with respect to the Placing orotherwise. No reliance may be placed for any purpose whatsoever on theinformation contained in this announcement or on its completeness. Collins Stewart Europe Limited (''Collins Stewart''), which is authorised andregulated in the United Kingdom by the Financial Services Authority, is actingexclusively for the Company as its nominated adviser and for the Company and theselling shareholders as broker and is not acting for anyone else in relation tothe Placing. Collins Stewart will not regard any other person (whether or not arecipient of this announcement) as its client in relation to the Placing andwill not be responsible to anyone other than the Company and the sellingshareholders for providing the protections afforded to clients of CollinsStewart or for providing any advice in relation to the Placing, the contents ofthis announcement or any transaction or arrangement referred to herein. Theresponsibility of Collins Stewart as nominated adviser is owed solely to theLondon Stock Exchange and not to the Company or its directors or any otherperson in respect of his decision to acquire shares in the Company in relianceon any part of this announcement. Collins Stewart has not authorised thecontents of this announcement and does not accept liability for the accuracy ofany information or opinions contained herein, or for the omission of anyinformation from this announcement, for which the Company and its directors aresolely responsible. No representation or warranty, express or implied, is made or given by or onbehalf of the Company or Collins Stewart or any of their respective directors,partners, officers, employees, agents or advisers or any other person (whetheror not referred to in this announcement) as to the accuracy, completeness orfairness of the information or opinions contained herein and no responsibilityor liability is accepted by any of them for any such information or opinions.Notwithstanding the aforesaid, nothing in this paragraph shall exclude liabilityfor any representation or warranty made fraudulently. Neither this announcement nor any copy of it nor any part of it should be sentto or taken into or distributed to persons with addresses in the United Statesof America, Australia, Canada, Japan or any other country where suchdistribution may lead to a breach of any law or regulatory requirement or to anynational, citizen or resident thereof or any company, corporation, partnershipor other entity created or organised under the laws thereof. Persons outsidethe United Kingdom into whose possession this announcement comes should informthemselves about and observe any restrictions and legal requirements in relationto the distribution of this announcement and their participation in anyproposals as set out in this announcement. Any failure to comply with theserequirements may constitute a violation of the laws of the relevantjurisdiction. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
POWR.L