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Hansol Paper CEO determines to reduce debt for new investment
Write 한솔제지 Date 2016-07-26




South Korea’s leading paper manufacturer Hansol Paper Co. will speed up deleveraging effort to improve financial state that includes rights offering to be able to afford to venture into new areas for growth.

Debts shot up as the company shifted into a holding structure, said Lee Sang-hun, CEO of Hansol Paper. The entire proceeds raised from new stock issue will be used to pay off debt to reduce the debt-to-asset ratio to below 200 percent from current 296 percent, he said.

The paper company is planning to bolster capital by issuing rights worth 70.4 billion won ($60 million) to existing shareholders.

The company aims to become lighter to accelerate investment in new areas, he said.

One area it has been eager is thermal paper. Thermal paper is paper coated with a chemical containing BPA that changes color when exposed to heat and is used to manufacture receipts given out in department stores, supermarkets and convenience stores. The company is the country’s largest supplier of such paper since it began production in May 2013 and the world’s third largest thermal paper manufacturer with annual capacity of 160,000 tons.

The company purchased companies and retailers in the field to achieve economies of scale and is hoping to buy more to become top in thermal paper sector, Lee said.

The company is buoyant in a new type of paper it has recently developed.

Aramid paper is insulating sheets used in transformers, motors and generators. The paper is high-performance and high-value paper, 50 times more expensive than printing paper.

“The paper manufacturing business could turn into the advanced material industry creating high value,” according to Lee.

“We expect to see significantly improved performance in the first half compared to last year thanks to low oil price and low pulp price,” he said. As for the outlook in the second half, he said, “positive factors and negative factors are mixed.” Low oil price would serve as a positive factor while pulp price bottoming out would be a burden on the company.

He promised to keep up friendly shareholders’ policy. The maintained its dividend payout at more than 20 percent of net profit. Last year, it paid out 32 percent of net profit as dividends.

By Noh Hyun


http://pulsenews.co.kr/view.php?sc=30800021&year=2016&no=463496

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