Also Pursuing Strategic Option for Asian Corrugated Box Business Will Continue to Supply Asian Markets with Globally Competitive Products

MEMPHIS, Tenn. - International Paper today announced that it has entered into a definitive agreement with its Chinese coated board joint venture partner, Shandong Sun Holding Group Co., Ltd., to sell its 55% equity interest in the joint venture (IP-Sun JV).  As consideration for the sale, the Company will receive RMB 149 million (or approximately US$23 million) in cash.  Additionally, the Company will remove approximately $400 million of currently outstanding debt from the Company's balance sheet, along with the other assets and liabilities of the IP-Sun JV, following completion of the transaction.  

International Paper also announced today that it is pursuing strategic options for its corrugated box business in China and South East Asia and has signed a non-binding letter of intent with a prospective buyer based in China.  

"International Paper undertook a thorough review of its position in serving the Chinese and  Asian markets," said Mark Sutton, International Paper Chairman and CEO. "The Company remains committed to serving these very important markets, but concluded we could be more effective supplying this region with globally competitive products primarily through our Ilim joint venture in Russia and from the U.S."

The IP-Sun JV transaction is expected to be completed within the next six months, subject to satisfaction of closing conditions, including obtaining required Chinese governmental approvals. International Paperestimates the agreement to sell the Chinese coated board joint venture, which started in 2006, will result in net pre-tax noncash asset write-offs of approximately US$200 million to be recorded in the third quarter of 2015. 

The table below reflects the IP-Sun JV balance sheet as consolidated in International Paper's balance sheet as of September 30, 2015.  The total asset and liability amounts below will be classified as assets and liabilities held for sale in IP's consolidated balance sheet as of September 30, 2015.  The IP-Sun JV will be deconsolidated from International Paper's consolidated balance sheet following the completion of the sale.

The IP-Sun JV has one manufacturing location in Shandong Province in China, which includes four paper machines and approximately 1.4 million annual metric tons of coated board capacity. International Paper'sIndustrial Packaging Asia business has 18 corrugated box plants in China and South East Asia and a workforce of approximately 3,000 employees.