Jan 04, 2005. /Lesprom Network/. M-real has signed a Letter of Intent to sell its forestland to a company to be founded called Forestia Holding Oy. The total transaction value is EUR 172 million of which M-real's share is 95%. The transaction will not have a material effect on M-real's result. The owners of Forestia Holding Oy will be Metsдliitto Cooperative with a share of 49.9%, Suomi Mutual Life Assurance Company with a share of 39.9% and the Central Union of Agricultural producers and Forest owners with a share of 10.2 %. The forestland comprising approximately 120,000 ha is currently owned by Forestia Oy, of which M-real's ownership is 95% and Metsдliitto Cooperative's 5%. As part of the overall arrangements, M-real will underwrite about EUR 24 million of the subordinated debenture which Forestia Holding Oy will issue in connection with the transaction. The bonds will yield 8.5% interest and M-real intends to sell them in the secondary market. Under the terms of the transaction, Forestia Holding Oy will buy the forest land of Suomi Mutual Life Assurance Company for a consideration of about EUR 21 million. The parties plan to complete the transaction before the end of March 2005. The deal is part of M-real's action plan to divest its non-core assets.