UPM has launched arbitration proceedings against Metsä Board Corporation

Nov 02, 2012. /Lesprom Network/. Metsä Board Corporation, a part of Metsä Group, divested on 3 May 2012 a 7.3 percentage point shareholding in Metsä Fibre Oy to Japan-based Itochu Corporation for Euro 138 million. At the same time Metsäliitto Cooperative, divested 17.6 percentage points of their holding in Metsä Fibre to Itochu. Metsä Board’s parent entity Metsäliitto had exercised on 24 April 2012 its call option pursuant to an amendment to the shareholders’ agreement to purchase the UPM-Kymmene Corporation’s 11 percentage holding in Metsä Fibre, as the company said in the press release received by Lesprom Network. UPM has initiated arbitration proceedings in which it claims jointly from Metsäliitto and Metsä Board primarily Euro 58.5 million in damages and secondarily to return an Euro 58.5 million claimed unjust enrichment. The claims are based on an alleged breach of the tag-along clause specified in Metsä Fibre’s shareholder agreement signed in 2009. Metsä Board considers UPM’s claim to be unfounded in its entirety and will not book provisions related to this claim. The claim does not have an effect on the Itochu transaction or on Metsä Board’s cooperation with Itochu and it is not based on agreements made with Itochu. The dispute initiated by UPM will be processed in a court of arbitration and the outcome will be announced later on. Metsä Board is Europe’s leading manufacturer of folding boxboard, the world’s leading manufacturer of coated white-top kraftliners and a significant supplier of paper.