Abitibi-Consolidated Inc. has concluded a share purchase agreement with Norske Skog pursuant to which Abitibi-Consolidated will divest its 50 percent share ownership in Pan Asia Paper Company Pte Ltd. for $600 million plus a cash purchase price adjustment of up to $30 million depending on the achievement of certain financial performance objectives in 2006.
Abitibi-Consolidated initially invested $200 million in 1999 during the creation of the original three-way partnership which formed PanAsia. When South Korean partner Hansol decided to exit in 2001, the company invested an additional $175 million.
With the sale of its interest in Pan Asia, Abicon plans on focusing its business on the North American market.
Abitibi’s share of PanAsia's 2005 newsprint capacity is 705,000 metric tons. Combined with the 350,000 metric tons of permanent capacity closures scheduled for this year, the new adjusted newsprint capacity will be approximately 4 million metric tons.
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