Overseas investment decision for case 201810082 - NS Norway Holding AS

• a freehold interest in approximately 351 hectares of land at:
  
  • Fletcher Avenue, Kawerau
  • 2805 State Highway No. 30
  • 217, 228, 250, 255, 261, and 261A Hogg Road
  • 118A and 188 Onepu Spring Road, Kawerau

• a leasehold interest in approximately 48 hectares of land off Onepu Springs Road, Kawerau.

The Applicant is an international newsprint and magazine paper producer that has been operating for about 50 years.  

Norske Skog AS, the entity being acquired, is in financial distress and is responsible for outstanding secured and/or guaranteed obligations.  As the security agent on behalf of secured creditors, the Vendor is selling all of Norske Skog AS' shares. The Vendor selected the Applicant as the successful bidder in a public auction.

Norske Skog AS’ New Zealand-based subsidiaries net tangible assets are collectively valued in excess of $100 million.  One of Norske Skog AS’ subsidiaries, Norske Skog Tasman Limited owns sensitive land in New Zealand, being approximately 380 hectares of land in Kawerau comprised of commercial forests, a paper mill (Tasman mill), a logyard, conservation areas and some publicly accessible areas.

The Applicant intends to continue to run the business from New Zealand in conjunction with its international paper mills and product supply chains across several countries including Austria, Ireland, Poland, and Australia.

We note that the international paper market is experiencing aggregate oversupply issues and there is generally expected to be on-going decreasing demand for paper products over the longer term. 

We consider that without this Investment, the Tasman mill and New Zealand-based business of Norske Skog Tasman Limited are likely to be closed down in the short term.

This Investment is likely to enable the business and Tasman mill to continue operating while it is economically feasible to do so.

Ministers were satisfied that the Investment would be likely to achieve a number of benefits, including:

• retaining more than 150 FTEs on the Land and more than 10 FTEs elsewhere in New Zealand which would otherwise be lost;

• maintaining export receipts of more than approximately $65 million per annum;

• maintaining market competition in the chip and pulp log processing industry (particularly in the central North Island);

• maintaining processing of primary products and a higher level of productivity on the Land as a result of the Tasman mill remaining open;

• continuing to produce approximately 140-150 kilotonnes of newsprint;

• maintaining existing protections and enhancements for native flora and fauna, preserving public access and iwi cultural protections on the Land, and exploring further protections, enhancements, and access the Applicant can reasonably provide; and

• retaining papermaking expertise in New Zealand which is likely to otherwise be lost without the Investment.