U.S. co International Paper closes deal on sale of 50% stake in Ilim to Russian beneficiaries of JV

MOSCOW. Sept 18 (Interfax) - U.S. company International Paper has completed the sale of 50% of shares in Swiss holding company Ilim SA, which owns the largest pulp and paper producer in Russia - Ilim Group, to its Russian JV partner - Ilim Global Timber Rus LLC, owned by Zakhar Smushkin and Boris Zingarevich.

"The deal has undergone all necessary approvals and is officially finalized," Ilim said in a statement.

In March of this year, the Ilim press service reported that the subcommittee of the Government Commission on Monitoring Foreign Investment approved the deal for International Paper's withdrawal from the JV. At that time, it was reported that the deal was in its final stage and the parties expected to close it in April.

Ilim SA owns 96.37% of Ilim Group JSC. International Paper became a shareholder of Ilim SA in 2007, paying $650 million. International Paper directly owned 2.39% of shares in the group. The parties also agreed on the sale of these shares for $24 million.

It was reported earlier that the transaction amounted to $484 million. The value of Ilim as a whole is estimated at about $3.5 billion based on a multiplier of 3.1 to EBITDA at the end of 2022 (according to preliminary unaudited data, this figure for the group amounted to $1.11 bln), the value includes net debt of $2.45 billion.

Ilim is one of the largest pulp and paper companies in Russia, accounting for 77% of all commercial pulp, 16% of packaging materials, and 25% of white paper produced in the country. The majority (70%) of Ilim's products are exported (50% of the company's total sales are to China). The company has production facilities in the Arkhangelsk, Irkutsk, Leningrad and Moscow Regions. In 2022, Ilim's annual output of finished products amounted to 3.63 million tonnes. By 2024, this figure should increase to 4.2-4.3 million tonnes (at the same time, the company plans to increase deliveries to China to 2.4 million tonnes per year by 2025 from 1.72 million tonnes in 2022).