Although M-real still remains committed to Map, president and chief executive designate Hannu Anttila, who takes up his new role on 1 January 2005, said opportunities would be evaluated.

This could see a consolidation of the Map business with strategic partners and lead to a dilution of M-real's ownership to below 50%.

In the UK Map comprises of the merchant companies of Premier Paper, MoDo Merchants, James McNaughton and Talk Paper.

Approximately 15% of M-real's fine paper sales are to Map, whilst 35% of Map's deliveries are from M-real.

Anttila said M-real would make a return to an organisational structure it had previously, focusing on its core businesses, and aligning sales with marketing.

The announcement follows an extensive review of M-real's operations by Anttila.

This had confirmed that M-real's core businesses are: consumer packaging, publishing, commercial printing and office papers.

Major investments in the future would be focused on high-value areas such as high-quality packaging and graphics products.

An EGM has been called for 6 September to approve the 304m rights issue, which Anttila said was aimed at restoring the company's financial flexibility.

M-real's 473m revolving credit facility, which matures in 2005, will be replaced by a new facility of approximately 338m.

The new organisation and corporate executive board will come into place from 1 September, and has resulted in the departure of executive vice president for marketing and sales, Veli-Matti Mynttinen, at his own request.

The long downturn the industry has seen over the past three years had hit European manufacturers hardest, not least M-real.

The company's level of indebtedness had remained high, and had not reduced as quickly as had been expected, Anttila said.

Under the new programme, Anttila said he was confident some 20m of cost savings could be made in 2004.

Its 2001-2003 cost reduction programme, which had targeted 199m in cost savings, has been completed.

However some 27m of the expected cost reductions had not been achieved.

Although he said opportunities exist for investment in the market, Anttila underlined there would be no significant acquisitions by the group in either the near to medium term.

M-real had sales of 3.6bn in 2003, and an operating profit of 26m.

It employs 19,600 staff worldwide.

Story by Andy Scott