Stora Enso Divests its North American Paper Operations to NewPage to Create a North American Paper Industry Leader

Stora Enso Divests its North American Paper Operations to NewPage to Create a North American Paper Industry Leader

September 24, 2007

The Transaction Value is Approximately USD 2 520 Million
(EUR 1 816 Million)


    HELSINKI, Sept. 24 /Xinhua-PRNewswire/ -- Stora Enso
has signed a definitive agreement to sell Stora Enso North
America, Inc ("SENA"), its North American
subsidiary, to NewPage Holding Corporation
("NewPage"), a leading North American coated
paper producer. The combined company, to be called NewPage,
will be among the North American leaders in its field. 
 
    Transaction consideration consists of USD 1 500 million
(EUR 1 080 million) in cash, USD 200 million (EUR 144
million) in vendor notes and 19.9% of the shares in the new
company valued at approximately USD 370 million (EUR 267
million). NewPage will also assume net liabilities of about
USD 450 million (EUR 324 million). The transaction is
expected to be finalised during the first quarter of 2008,
subject to customary regulatory approvals. 
 
    The transaction will not generate a gain or loss when
recognized in the third quarter of 2007, at current
exchange rates and based on the book values of the assets
prior to the impairment charge announced by Stora Enso on 5
September 2007. Furthermore, the divestment will reduce the
estimated impairment charge of EUR 1 300 million by about
EUR 800 million. The final gain or loss, if any, will be
determined when the transaction is completed. The
divestment is expected to have no material impact on the
annual operating profit of the Stora Enso Group as the
North American businesses being divested are currently
about breakeven at the operating profit level.
 
    "We believe that by combining Stora Enso's North
American operations with those of NewPage, owned by
Cerberus Capital, a leading private investment firm, we are
contributing to the formation of a highly attractive player
in the North American paper industry" said Jouko
Karvinen, Stora Enso Group CEO. "This is the first
major step in focusing our operations to improve the
long-term earnings of Stora Enso. The divestment will
simplify our Group structure and strengthen our focus on
Europe as well as Stora Enso's growth markets," said
Karvinen.
 
    NewPage and SENA's combined pro forma annual sales and
EBITDA were approximately USD 4 300 million (EUR 3 099
million) and USD 525 million (EUR 378 million),
respectively, in 2006. The new company will be comprised of
12 paper mills with estimated production capacity of 4 754
000 tonnes. NewPage will be headquartered in Miamisburg,
Ohio. Through its 19.9% interest, Stora Enso will
participate in the benefits of the combination including
value creation from significant cost synergies.
 
    As part of the transaction, Stora Enso will divest
eight publication, fine paper and speciality paper mills
which will reduce the Group's annual production capacity by
2 745 000 tonnes and the number of personnel by about 4 350.
The divested mills include Biron, Duluth, Kimberly, Niagara,
Port Hawkesbury, Stevens Point, Whiting and Wisconsin Rapids
mills.
 
    Stora Enso will retain Corenso's North American
operations. Corenso produces cores and coreboard for
industrial use in various fields of business. 
  
    Estimated financial impact on Stora Enso Group

    Sales reduction               EUR 1 950 million*
    EBITDA reduction              EUR 189 million*
    Capital employed reduction    EUR 1 750 million
    Debt/equity ratio             From 0.64 to 0.42**

    * Based on 2006 results for the divested businesses,
with an average exchange rate of EUR/USD 1.2563

    ** Including impact of reversing the impairment from
EUR 1 300 million to EUR 500 million in the third quarter
of 2007
 
    The divested Stora Enso North American operations will
be reported as discontinued operations from the third
quarter of 2007 onwards. The 19.9% ownership in the new
company is considered as a financial investment and
accounted for as an asset held for sale.
 
    The USD figures are translated at the EUR/USD exchange
rate of 1.3877.
 
    UBS Investment Bank and Poyry Capital acted as
financial advisors and Cleary Gottlieb Steen & Hamilton
LLP acted as legal advisor to Stora Enso in connection with
the transaction.
 
    CONFERENCE CALL

    CEO Jouko Karvinen and Deputy CEO & CFO Hannu
Ryopponen host a combined conference call and webcast at
15:00 Finnish time (13:00 UK time, 08:00 US Eastern time)
on September 21.  
 
    The live webcast may be accessed at
http://www.storaenso.com/investors .
 
    About NewPage Corporation 

    NewPage Corporation, headquartered in Miamisburg, Ohio,
is a leading US producer of coated papers in North America.
The company produces coated papers in sheets and rolls with
many finishes and weights to offer design flexibility for a
wide array of end uses. With more than 4 300 employees,
NewPage operates integrated pulp and paper manufacturing
mills located in Escanaba, Michigan; Luke, Maryland;
Rumford, Maine; and Wickliffe, Kentucky; and a converting
and distribution centre in Chillicothe, Ohio.


    For further information, please contact:

     Jouko Karvinen, CEO
     Tel:  [phone]

     Hannu Ryopponen, CFO
     Tel:  [phone]

     Kari Vainio
     EVP, Corporate Communications
     Tel:  [phone]

     Keith B Russell
     SVP, Investor Relations
     Tel:  [phone]

     Ulla Paajanen-Sainio
     VP, Investor Relations and Financial Communications
     Tel:  [phone]