Paper, pulp and packaging group Sappi will sell its Usutu Forest Products subsidiary to timber products provider Montigny Investments for R1-billion in cash.
The proceeds from the sale of Usutu, which controlled some 67 000 ha of softwood plantations and a decommissioned pulp mill, in Swaziland, would be used for general corporate purposes and would reduce Sappi's net debt level to $2.05-billion.
The company said in a statement on Monday that its need for softwood had been reduced following the conversion and expansion of its Ngodwana plant to produce dissolving pulp rather than bleached softwood.
The transaction remained subject to various conditions precedent, including royal assent from the King of Swaziland, approval from the competition authorities in Swaziland and South Africa and approval in terms of the South African Exchange Control Regulations.
These conditions were expected to be fulfilled and the transaction implemented by September 30.