Norske Skog, the struggling Norwegian newsprint producer, is to sell its two Korean paper mills to private equity funds in a transaction worth Nkr4.3bn ($830m).

The divestment will cut Norske Skog’s net debt, improve liquidity and give management a breathing space to boost profitability and reschedule maturing debts. Norske Skog’s shares soared by almost a quarter on the announcement and closed up Nkr5.00 at 27.70.