Packages Limited’s announces start of joint venture with stora enso

Karachi, May 31, 2013 (PPI-OT): In continuation of our earlier communication dated 18 September 2012 on the captioned, Packages Limited (PKGS) hereby announces the start of a joint venture (“JV”) with Stora Enso OYJ of Finland in its 100% wholly owned subsidiary Bulleh Shah Packaging (Private) Limited (formerly Bulleh Shah Paper Mills (Private) Limited) (“Company”). Stora Enso’s initial shareholding will be 35% by way of subscription to right shares with a commitment to increase the shareholding to 50% at a later stage subject to certain conditions being met.

The J V will include operations in Kasur Mills (paperboard arid corrugated packaging) and Karachi (corrugated packaging).

The target of the joint venture is 10 serve key local and multinational brand owners in Pakistan with packaging products such as liquid packaging board, folding boxboard and corrugated packaging. Also the JV will continue with its extensive investment program to further improve its product quality and competitiveness including new alternate fuel based boiler investment.

The agreed value for 100% of the joint venture company is USD 107.5 million on a cash and debt free basis with additional equity to be subscribed by Stora Enso, through right shares in the joint venture company of USD 17.5 million, based on the financial results of H2 2012 and HI 2013. Packages shall continue to hold at least 50% ownership and future profits of the JV.

As part of the agreement, both parties are committed to a substantial USD 135 million investment program to develop the business further. To finance this investment program, Packages has contributed USD 18.5 million in cash to the JV Company.

The joint venture will meet Stora Enso’s and Packages investment targets and the investments at Kasur mill, including a new alternate fuel based power plant, will further improve the product quality, competitiveness and profitability of the mill.

The joint venture employs about 950 people and its annual capacity will be 360,000 tonnes of paper board when the investments have been completed.

For more information, contact:
Adi J. Cawasji
Company Secretary
Packages Limited
Shahrah-e-Roomi, P.O. Amer Sidhu,
Lahore- 54760, Pakistan
Ph: 35811541-46
Fax: (042) 35811195