(Reuters) - Indian conglomerate Aditya Birla Group has agreed to buy Canada’s Terrace Bay Pulp Mill for about $110 million to feed its fiber plants globally.
Aditya Birla will buy the mill through a holding company, AV Terrace Bay Inc. Two of the group’s textile companies, Grasim Industries Ltd (GRAS.NS) and Thai Rayon Pcl (TR.BK), will own stakes of 40 percent and 60 percent in AV Terrace Bay.
Grasim will invest $44 million of the total equity contribution over the next three years, the group said in a statement on Thursday.
The group plans to invest more than $250 million to convert the paper grade pulp mill to produce dissolving grade pulp with a capacity of 280,000 metric tons (308,647 tons) per annum.
Situated in the north shore of Lake Superior, Ontario, the mill, which came under protection from creditors in January, will re-open in October and will make paper grade pulp until fiscal year 2016, when the conversion will be complete.
Aditya Birla Group, whose companies include aluminum producer Hindalco Industries (HALC.NS), cement producer UltraTech Cement ULTC.NS and mobile operator Idea Cellular (IDEA.NS), expects to close the deal by July 31.
Reporting By Harichandan Arakali in BANGALORE; Writing by Aradhana Aravindan; Editing by Gopakumar Warrier