Setra is for sale. Expected price 178 000 000 Euro

July 4, 2010 by timbercommunity

The Sawmill group Setra is for sale and principal shareholders Sveaskog, LRF and Mellanskog has started the sales process. Price expectations are around 178 000 000 Euro.  Setra is Sweden's largest wood products company with with annual sales of approximately 431 million Euro and production in sixteen locations in Sweden.

The state owned company Sveaskog has for a long time mandate from parliament to sell its stake in Setra. A seven-year-old parliamentary decisions state that Sveaskog must sell its sawmill operations Setra. Recently the Swedish National Audit Office (Riksrevisionsverket) criticised that the sale was not completed yet despite last years strong economy for the sawery. 
But big losses in recent years, a total of SEK 800 million after net financial items in 2008 and 2009, has meant that it was not the right time to sell the company. Setra’s raw material costs account for approximately 50% of operating expenses.
However now the situation has changed and improved after injection of capital by the owners and a turnaround in the business cycle. The improved result is explained both by internal efficiency gains and by an improved market situation with higher price levels. Setra reports an operating profit for the first quarter of 2010 SEK 15 million, which is SEK 200 million better than in the same period last year.
For some time, there has been a power struggle for ownership between the owners of the Setra Sveaskog, LRF and Mellanskog and Sveaskog which would have withdrawn a loan commitment to the Setra Setra that would put in a economic crisis. Sveaskog owns 50 percent of the shares, LRF 22 percent and 27 percent Mellanskog.

As a potential buyer Sveaskog President sees  both sawmills and institutional investors. Russian venture capitalists is one of several potential buyers. The issue has been discussed for a long time and we are close to a sale, "says Borje Lagerquist, East Amtervik, Chairman of Mellanskog, the NWT. Recently, the Russian venture capitalists, with interests in Russian oil industry, bought two of Germany's most famous sawmill.
Sawmill Setra Group has operations in 16 locations in Sweden and some activities in Norway. The company has 1013 employees (1167) and 2400 shareholders.

The company has broad geographical focus with exports to Europe, North Africa, the Middle East and Japan account for almost 60% of sales. Setra’s sales primarily consist of sawn and planed wood products.
 

Key facts Setra 2009 (Source: Allabolag.com and currency converter July 2010)
Turnover in 2009 was 431,622,667 Euro
Income after financial items  39,912,819 Euro
Total assets    303,525,502 Euro
Equity         128,201,649. Euro
Profit margin      -7,84 % 

Attachment: 

interim-report-january-march-2010.pdf