Paper maker Norske Skog has sold its closed Follum mill to Viken Skog, and will sell the Bio Bio newsprint mill in South America to a consortium of Chilean investors.

Group BO are paying US$56 million for the facility, at which it plans to continue producing newsprint.

Both arrangements are part of a strategy to improve the company’s cash flow and financial position. President and chief executive Sven Ombudstvedt sats Norske Skog is “very pleased” to be able to sell the Chilean operations to an industrial player with long-term plans for the mill.

Bio Bio has a total newsprint production of approximately 125,000 tonnes, and is one of total four newsprint mills in South America. The same partners are also involved in BO Packaging, a leading Chilean and Peruvian packaging business. The consortium is headed by the Pathfinder Group, former owners of Masisa, and has interests in packaging, glass products, building products, agribusiness and real estate.

Norske Skog says the transaction is expected to close in the second quarter of this year.

At Follum, Viken Skog will now take over the task of creating new activities at the closed mill site. Ombudstvedt says it was important to find a buyer with ambitions for the future, with support from the local county and municipal councils, regional businesses, and trade unions.

Viken Skog will develop a forest-based industry cluster, making Follum a centre for sustainable development of environmentally friendly forest products.

Net sales proceeds of the deal are “in the order of NOK 60 million”, the company says. Norske Skog will disassemble and retain parts of the technical production equipment, and was due to stop production there this week.