Hokksund, Norway 09 Apr 2013 -- Norwegian book paper producer Hellefoss AS, its affiliate, pulp producer Vafos AS, and their parent company Hellevad AS filed for insolvency on Friday 5 April 2013, managing director Trond Lindborg confirmed to EUWID. Both mills were presently offline, but the company was working urgently to resume production as soon as possible, Mr Lindborg said. However, the company first needs to come up with financing.

Mr Lindborg said that the firm was currently exploring any and all options to get production up and running again. Talks were in under way with potential investors. The creation of a new company to maintain production was not being ruled out, either. Disruption for customers should be kept to a minimum.

A timetable has not been drafted yet for restructuring Hellefoss and Vafos. The only certainty is that the process should move ahead as quickly as possible, Mr Lindborg remarked. One common risk for insolvent firms in Norway is that skilled employees can find a new job easily and are thus gone to other companies very quickly. Both mills employ a total of some 140 workers.

Hellefoss AS is an integrated manufacturer of book paper from mechanical pulp. Its paper machine has a capacity of 50,000 tpy, the mill has been in existence since 1898.

Vafos AS solely makes unbleached mechanical market pulp and has a capacity of 75,000 tpy. Founded in 1889, the company started struggling after it lost a major customer at the start of the year. However, Vafos is currently working to land new customers and strengthen its presence in markets outside Europe, noted Trond Lindborg. Vafos also wants to offer new types of bleached mechanical pulp in the future. Development work has been very promising to date, he continued.

Hellevad AS was created in 2004 when Borregard sold the Hellefoss and Vafos mills as part of a restructuring initiative; the two sites were then merged to form a new group of companies.