Inveresk chief executive Alan Walker said the stake had been sold purely because conditions in the market were tough, and because Klippan was in the process of sorting itself out.

In July, Klippan announced a cost-cutting programme aimed at making savings of 2.6m, cutting 103 jobs at four mills in the process.

However, Klippan chairman Jan Bernander and his associates still retain their shareholdings in Inveresk.

Inveresk was able to spin the sales of the shares out very quickly to institutions, Walker said.

The latest move follows Klippans closure of Caldwells mill in September with the loss of 160 jobs, less than a year after it bought the customer list and inventory (PrintWeek, 4 September).

The plant and machinery at the Fife mill was handed back to Inveresk due to its retained ownership of the fixed assets.

Klippan rented the land and machinery from Inveresk for an initial 100,000 fee, which was due to increase by 100,000 per year until 2007, but it has asked Inveresk to terminate the lease.

Walker said Inveresk had started discussions with Fife Council and Scottish Enterprise Fife regarding the development of the 18-acre site at Inverkeithing.

We now have a fairly good idea of what we would like to see happen to the site, he said. One alternative is for it to be converted for housing development.

A number of third parties had also expressed an interest in acquiring the plant and equipment from the mill, added Walker.

Story by Andy Scott