Norske Skog soars on Sveaas’ stake

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Norwegian investor Christen Sveaas has emerged as a would-be saviour for long-ailing forestry firm Norske Skog. His purchase of a major block of stock in the firm that’s profitable but drowning in debt came as a surprise to the company’s new CEO, Lars Sperre, and sent the company’s share price soaring.

Investor and philanthropist Christen Sveaas, shown here at his Kistefos Museum in Norway, has now invested heavily in debt-laden Norske Skog. He has a lot of experience in restructuring and recapitalizing companies and has thus emerged as a potential saviour for what once was one of Norway’s biggest companies. PHOTO:

“I think it’s nice that folks buy shares in Norske Skog,” Sperre told newspaper Dagens Næringsliv (DN) as he prepared to discuss the framework for his troubled industry at the major political gathering going on this week in Arendal, on Norway’s southern coast. “We’ll see what it means for the process (of debt negotiations with creditors) we’re now in.”

Sveaas reported Tuesday morning that he had bought 24 million shares in Norske Skog, thus becoming its single largest shareholder. He now owns a total of 35.7 million shares in the company, amounting to a 12.81 percent stake, according to the report to the Oslo Stock Exchange filed through Sveaas company Kistefos. It’s rooted in the forestry and cellulose business in Norway and Sveaas has also invested large amounts restoring some of its original operations and turning it into an industrial and art museum called Kistefos in Jevnaker, northwest of Oslo.

Sveaas clearly doesn’t want to see Norske Skog wind up with assets only fit for a museum, and seems keen on keeping the company going. It’s been described as a fundamentally sound operation, with an operating result last year of more than NOK 1 billion, but it’s burdened by debt acquired during major international expansion.

DN reported that Sveaas’ purchase came just a day after Norske Skog’s former major shareholder, US-based Blackstone, dumped all of its 24 million shares for just NOK 0.40 per share. After news of Sveaas’ purchase, the share price jumped 35 percent.

His purchase also comes just three days before the company faces a deadline with its creditors that was extended from last week. Sveaas himself has noted that the company risks going bankrupt if no deal is agreed, but he also has warned state officials against stepping in and trying to bail out the companuy. The government, he told DN earlier this month, shouldn’t “meddle” and rather let creditors and Norske Skog’s owners resolve the situation.

Now he’s the biggest owner and will likely have his say in the “process” to which Sperre referred. Sveaas also owns large tracts of forest around the Randsfjord, where Kistefos is based, and he’s the next-largest shareholder in Stangeskovene, which owns karge tracts of forest in the Norwegian counties of Østfold, Akershus and Hedmark. Norske Skog, which has concentrated on producing paper for newspapers and magazines, has one of its two major plants in Norway in Halden, in southern Østfold.

DN noted that Sveaas has experience in restructuring companies and has worked with several that have struggled financially. Among them was Viking Supply Ships, which ended up being able to keep its fleet afloat through 2019.

Sperre, meanwhile, described Norske Skog’s current situation as “demanding” but told DN that he thinks it’s in a process that “should be resolved in the course of the year.” He said he “definitely” has faith that Norske Skog will survive.

“We’re in a demanding process of recapitalization, but there’s no reason for that to overshadow the fact that the company has competitive entities, we generate cash and have investors who have invested in us because they see a long-term and interesting business.” Berglund