Norske Skog has in the past entered into Euro denominated energy contracts in Norway, reducing the group's exposure to the Norwegian krone. Financially, a contract combining energy prices and currency exposures is considered a hybrid instrument, containing a host contract and an embedded derivative. A hybrid instrument can be accounted for based on the host contract, or be split and accounted for by their separate elements. Norske Skog previously accounted for such contracts by their separate elements. In Q1 2015 Norske Skog changed the accounting principle to account for the host contract only. The change in accounting principle was agreed with the current auditor EY. However, on 1 April 2016 the company was informed by EY that the Norwegian Financial Supervisory Authority has made a preliminary assessment that such energy contracts should be accounted for by their separate elements.
European news agency EUWID reported that Germany’s recycled containerboard manufacturer Niederauer Muehle plans to take over the LWC paper mill in Walsum. According to the company’s management, it has entered exclusive talks with the insolvency administrator of Walsum Papier to buy the Norske Skog facility.
Under the new ownership, Walsum Papier would continue producing LWC on PM 10. In addition, Niederauer Muehle would convert the mill’s PM 4, which is standing idle since December 2013, to white-top testliner production.
On June 5 of this year, Norske Skog announced that it had decided to discontinue operations at its Walsum paper mill in Duisburg, Germany due to the mill being unprofitable. The mill had an annual production capacity of 205,000 tons of light-weight coated (LWC) paper and employed 291 people.