WASHINGTON (dpa-AFX) - International Paper (IP) said that it has entered into a definitive agreement with its Chinese coated board joint venture partner, Shandong Sun Holding Group Co., Ltd., to sell its 55% equity interest in the joint venture. As consideration for the sale, the Company will receive RMB 149 million or about US$23 million in cash.
Additionally, the Company will remove about $400 million of currently outstanding debt from the Company's balance sheet, along with the other assets and liabilities of the IP-Sun JV, following completion of the transaction.
International Paper also announced that it is pursuing strategic options for its corrugated box business in China and South East Asia and has signed a non-binding letter of intent with a prospective buyer based in China.
The IP-Sun JV transaction is expected to be completed within the next six months, subject to satisfaction of closing conditions, including obtaining required Chinese governmental approvals. International Paper estimates the agreement to sell the Chinese coated board joint venture, which started in 2006, will result in net pre-tax noncash asset write-offs of approximately US$200 million to be recorded in the third quarter of 2015.
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