Botnia's Uruguayan operations transferred to UPM; Approximately EUR 220 million capital gain on Botnia's Finnish operations

(UPM, Helsinki, 8 December 2009 at 15:00 EET) – UPM, Metsäliitto Cooperative, M-real Corporation, and Oy Metsä-Botnia Ab (Botnia) have today completed the transaction according to which Metsäliitto's and Botnia's share of the Fray Bentos pulp mill and the eucalyptus plantation forestry company Forestal Oriental in Uruguay are transferred to UPM. In the transaction, UPM sold approximately 30% in Oy Metsä-Botnia Ab to Metsäliitto and acquired 1.2% of the energy company Pohjolan Voima Oy from Botnia. The companies signed an agreement concerning the transaction on 22 October 2009.

UPM preliminarily estimates the financial impacts of the transaction to be as follows: UPM will record a EUR 220 million capital gain on the sale of Botnia's shares in the fourth quarter of 2009. In addition, the changes in the fair values and the previous indirect holding will increase UPM's equity by approximately EUR 500 million. In UPM's balance sheet, assets are estimated to increase by approximately EUR 1,300 million and interest-bearing net debt by approximately EUR 350 million. The transaction is expected to have a positive impact on UPM's results in 2010 and a minor impact on the gearing ratio.

The enterprise value of the Fray Bentos pulp mill and Forestal Oriental totals approximately EUR 1.6 billion and the enterprise value of Botnia without the Uruguayan operations and shareholding in Pohjolan Voima Oy is approximately EUR 1.9 billion.

Following the transaction, UPM has a 91% ownership in the Fray Bentos pulp mill, 100% in Forestal Oriental and approximately 17% in Botnia.

For more information, please contact:
Mr Tapio Korpeinen, President, Energy and pulp Business Group, UPM, tel. +358 40 730 0090
Mr Jyrki Salo, Executive Vice President and CFO, UPM, tel. +358 204 15 0011