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SCA has decided on capital structure and dividend policy targets for its hygiene business.

The capital structure target for SCA’s hygiene business is to have an effective capital structure at the same time that the long-term access to debt financing is ensured.

Cash flow in relation to net debt will take into account the target to maintain a solid investment grade rating.

The company said: “SCA’s hygiene business aims to provide long-term stable and rising dividends to its shareholders.

“When cash flow from current operations exceeds what the company can invest in profitable expansion over the long term, and under the condition that the capital structure target is met, the surplus shall be distributed to the shareholders.

“As per 30 September 2016, SCA’s net debt, including pension liabilities, amounted to SEK 40,281m, allocated pro forma as follows: SEK 35,281m attributed to the hygiene business and SEK 5,000m to the forest products business.”

SCA’s current lenders will be given the possibility to switch counterparty to SCA Hygiene AB, the Parent Company of SCA’s hygiene business or its subsidiaries.

In a statement the company said: “Due to this SCA informs that the company is currently participating in a process relating to a potential corporate acquisition.

“The process is still in an early phase but no decisions have been made.

“However, any potential acquisition by SCA will be made without prejudice of the capital structure targets.”