Segezha Group (MOEX: SGZH), a subsidiary of Sistema PJSFC and a leading vertically integrated holding company in the timber industry performing a full cycle of operations from logging to advanced wood processing, today announces that Lesosibirsk LDK (a Segezha Group company) has exercised an option agreement with Non-core assets Bank “Trust” for the acquisition of a majority stake in Tegli Holdings Ltd (the parent company of Novoeniseisk Wood-Chemical Complex (NLHK)) and the completion of consolidation of control of NLHK. NLHK is consolidated into Segezha Group’s financial statements under IFRS with effect from 15 September 2021.

With Segezha Group’s assistance, on 15 September 2021 a settlement agreement was concluded between the parties to the NLHK bankruptcy case and the case was dismissed. Previously, on 27 July 2021, Segezha Group acquired a minority stake in Tegli Holdings Ltd, which owns 100% of NLHK’s equity.

NLHK’s production capacities include 500,000 cu m of sawn timber, 100,000 tons of pellets and approximately 20 mln sq m of fibreboard. The complex also has an annual allowable cut of 2.2 mln cu m. NLHK’s assets are located in the town of Lesosibirsk, Krasnoyarsk Krai, which is also home to Segezha Group’s Lesosibirsk LDK, one of the largest wood processing facilities in Russia. Consolidation of these assets will create synergies in a number of areas including NLHK's logistics infrastructure and transport assets (including river transport), enabling Segezha Group to optimise raw timber supplies and achieve 100% self-sufficiency in raw timber in the region. Sawn timber production capacity will increase by 15% per year, while pellet production capacity will double.

Martin Hermansson, who previously controlled a minority stake in NLHK, has joined Segezha Group’s Board of Directors following a decision taken at an Extraordinary General Meeting of shareholders (EGM) on 23 September 2021. Mr Hermansson brings extensive experience in added-value wood conversion and international sales, which will greatly benefit the Board of Directors.