US-based paper and packaging company International Paper has announced its exit from Chinese coated board joint venture to focus on its Asian corrugated box business.

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The company has signed a definitive agreement with Shandong Sun Holding Group, which is its Chinese joint venture partner, to sell its 55% equity stake in the combined business entity, known as IP-Sun JV.

The stake sale entails that International Paper will receive CNY149m ($23m) in cash proceeds. The company will also be able to reduce its outstanding debt of $400m, following the completion of the transaction.

"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 US."

International Paper plans to focus on its corrugated box business in China and South East Asia. In this regard, it has signed a letter of intent (LoI) with an interested buyer based in China.

International Paper chairman and CEO Mark Sutton said: "International Paper undertook a thorough review of its position in serving the Chinese and Asian markets.

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"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 US."

The stake sale is expected to be completed in the next six months, following regulatory approval.

International Paper expects the stake sale to result in net pre-tax noncash asset write-offs of around $200m, which will be reported in the third quarter of 2015.

Earlier this year, International Paper was contemplating the acquisition of Irish packaging producer Smurfit Kappa for €8bn, to take advantage of the dollar’s gains, which made the European companies cheaper.