Natural Resource Partners L.P. and International Paper recently announced that they have signed a definitive agreement to form a joint venture in which Natural Resource Partners will be the managing and controlling partner with a 51% interest, including a cumulative preferred distribution from the joint venture before profit sharing commences. The new joint venture will own and manage the current leases as well as the further development of the more than 7 million mineral acres currently held by International Paper. Natural Resource Partners will pay International Paper approximately $42.5 million at closing, which is anticipated to occur in mid-June.
"This new joint venture with International Paper will continue to diversify our assets and income stream while providing us current cash flows and upside potential from the millions of undeveloped acres included in the venture. The agreement is being structured to provide Natural Resource Partners with a reasonable return on our initial investment with significant upside potential for both parties," said Corbin J. Robertson, Jr., Chairman and Chief Executive Officer of Natural Resource Partners. "We are also pleased to have the current mineral management team of International Paper join Natural Resource Partners to assist in managing and developing the vast mineral holdings of the new joint venture."
"This is an attractive monetization of our non-core assets, and it allows us to share in the future value creation of the mineral rights." said Tim Nicholls, Chief Financial Officer of International Paper.
