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This is an archive article published on July 6, 2012
Aditya Birla group buys Terrace Bay Pulp Mill
Aditya Birla group has agreed to purchase assets of Terrace Bay Pulp Mill in North Western Ontario,Canada for a total equity contribution of 110 million,and plans to invest more than 250 million to convert the facility to dissolve wood pulp for rayon fibre
Written by ENS Economic Bureau
Mumbai | July 6, 2012 01:24 AM IST
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Aditya Birla group has agreed to purchase assets of Terrace Bay Pulp Mill in North Western Ontario,Canada for a total equity contribution of 110 million,and plans to invest more than 250 million to convert the facility to dissolve wood pulp for rayon fibre.
The Birlas will make this acquisition through a special purpose vehicle,AV Terrace Bay Inc Canada. Grasim Industries proposes to hold a 40 per cent stake in AV Terrace Bay Inc and the remaining 60 per cent is proposed to be held by Thai Rayon Public Co Ltd. In the next three years,Grasim would be contributing 44 million,out of the total equity contribution of 110 million.
Said Kumar Mangalam Birla,Chairman,Aditya Birla Group,The acquisition of the Terrace Bay Mill and its subsequent conversion into a dissolving grade pulp mill is a major strategic move. In the VSF business,we enjoy global leadership. Terrace Bay Mill was placed under Companies Creditors Arrangement Act in January 2012.
The group will be investing more than 250 million in a phased manner to convert the mill to produce dissolving grade pulp with a capacity of 2,80,000 tpa. Until the conversion,which is likely to happen in FY16,the mill will produce and sell paper grade pulp. The paper grade pulp mill should restart by October 2012.
The transaction is subject to court approvals in Canada and other Regulatory approvals in Canada,Thailand and India. It is expected to close by July 31,2012.
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