UPM-Kymmene launches bid to claim damages over deal

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UPM-Kymmene seeks damages against Metsäliitto Cooperative
Metsä Group’s parent company Metsäliitto has said today that UPM-Kymmene has launched arbitration proceedings to claim €58.5m in damages in relation to a deal earlier this year.

The proceedings follow the divestment in May 2012 between Metsaliitto Cooperative, Metsä Board and Japan-based Itochu Corp. in which Itochu bought a 24.9% stake in Metsä Fibre Oy for €472m.

In connection with the deal, Metsäliitto exercised its call option to purchase UPM-Kymmene’s ownership in Metsä Fibre.

Metsäliitto said the claims are based on an alleged breach of the tag-along clause specified in Metsä Fibre’s shareholders’ agreement signed in 2009. 

The firm said it considers the claim unfounded and will not book provisions related to it and there is no effect on Metsä Group’s transaction and cooperation with Itochu.

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