Portuguese conglomerate Sonae SGPS (SONP.IN) and Finnish forest products firm Stora Enso have discussed Portuguese paper company Portucel (PORT.IN), earkmarked for privatisation, a newspaper reported on Friday. Semanario Economico said Sonae Chairman Belmiro de Azevedo had met with a Stora Enso executive to discuss informally "coexistence in the shareholder structure of Portucel". The newspaper cited a government source and said the government had sponsored the meeting. An Economy Ministry spokeswoman, however, denied that the conversation had been arranged by the government. A Sonae spokesman had no immediate comment on the story. Portugal holds 56 percent of Portucel, one of the biggest makers of uncoated fine paper in Europe. The government wants Portucel to increase its capital by up to 25 percent by issuing stock for assets or shares in the company. Sonae, a retail-to-telecoms conglomerate, holds 29.2 percent of Portucel. Stora Enso, the world's biggest maker of paper and boards, is only interested in Portucel if it can take a controlling stake, the company said last week. Portucel was off 0.85 percent at 1.17 euros and Sonae eased 2.44 percent to 40 cents. The drops came as the benchmark PSI20 index was about one percent lower and the Dow Jones Stoxx basic resources index was up 0.7 percent.