The paper company announced in December last year that it would be closing its manufacturing operations in Tasmania to focus solely on merchanting, and that it would be closing its Wesley Vale mill and a portion of its Burnie mill as a result. It gave itself until June this year to complete a sale or full closure of the Burnie mill.
The vendor had claimed as recently as February that a sale of the Burnie mill was still a possibility.
Paperlinx managing director Tom Park said today that the company “will meet all of our obligations, as we have for all employees of Tas Paper who have lost their jobs as a result of our exit”.
“This has been a long and complex process, and while it is disappointing that we have not been able to find a sustainable outcome for the Burnie operations, we do believe that we have reached an outcome that is in the best interests of Paperlinx and its shareholders,” Park said.
The closure is expected to contribute to a $170m after-tax significant items charge in Paperlinx’s 2010 full-year results.
The company has already posted a $175.3m loss for the six months ending 31 December 2009, which included a one-off $103m significant item charge associated with its exit from manufacturing.
“From a Paperlinx perspective, we are pleased that we expect to complete our exit from paper manufacturing at a lower cost than initially thought, while continuing to meet all of our obligations,” Park said.
“We are now focussed on completing our refinancing programme, which is progressing well, and on ensuring that our competitive position is as robust as it can be in these uncertain economic times,” he added.
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