The Belgium-based company will be called Idem Papers, and will be headed up by Francis Tans, who is executive manager at the company. Tans was previously executive director of Arjowiggins.

An Arjowiggins spokeswoman said: "The buyout involves a team of local experienced managers, and they have got the support of the Walloon region. The staff will remain within the new entity."

The company added that it will keep its Security division, after it reported a solid performance with turnover up 6% and a 12% operating margin in the first half of 2009.

Arjowiggins said the disposal will generate a negative cash flow of €15m, and will have no impact on the second half 2009 statement as it is fully provided for at the end of June 2009.

Arjowiggins announced the decision to sell its loss-making carbonless paper division in March, citing weak market demand for the move.

The spokeswoman said Arjowiggins is now focusing on its profitable business, and is not looking at simply becoming a distributor instead of a paper manufacturer following the sale.

She added: "The company will continue to manufacture coated paper for printing and publishing (Graphic division, Coated US division), papers for corporate communications (Creative Papers division), technical papers for industrial applications (Industrial Solutions division), and Security paper solutions (Security division)."