Cham Paper Group becomes a real estate company

Cham Paper Group announced on December 5 that it will sell its specialty paper business to Sappi Group. The business includes the mills in Carmignano and Condino as well as the digital imaging team in Cham. Following the sale, the company intends to focus on its real estate business and operate in the market under the name "Cham Group".

The sale at a transaction value (enterprise value) of CHF 146.5 million will result in a cash inflow of CHF 125 million after deduction of bank loans, liabilities and costs, the company forecasts. This increases the flexibility for the development of the Papieri project. Due to the foreseeable higher equity ratio, a higher share of investment properties at the expense of the condominium ratio is conceivable, for example, Cham Paper Group informs.

Real estate investments beyond the Papieri site are also possible. On this factory site in the center of Cham, the Cham Paper Group is currently developing a new district covering eleven hectares. Two study contracts for the first two stages of the site development are scheduled to begin in January.

Share to become "attractive dividend stock

The Board of Directors wants to make the Cham Group share an attractive dividend stock. It will be proposed to the General Meeting of Shareholders to distribute a base dividend of at least CHF 6.00 as of the 2017 financial year. As soon as the Papieri site generates regular income - which is expected from 2022 onwards - the dividend will be based on the profit actually generated, the company says.

The sale of the specialty paper business must be approved by the shareholders at an Extraordinary General Meeting. The sale requires a change in the corporate purpose of Cham Paper Group Holding AG, which means that at least two-thirds of the votes represented at the General Meeting must approve the sale. In addition, the transaction must still be approved by the relevant competition authorities. The closing of the sale is expected in the first quarter of 2018.

The Board of Directors has examined all strategic options for the company in recent months and now considers the sale to be the "optimal solution", according to an ad hoc release from the company. The Cham Paper Group's specialty paper business is profitable and well positioned, but nevertheless too small to hold its own on the market in the longer term.