Conifex Timber informed that Canfor has exercised its option to convert the company’s senior secured note to acquire a Conifex subsidiary, which held a forest licence in British Columbia.
The option was agreed by the companies in the mid-2015, when Canfor loaned CAD 30 million to Conifex. The loan was represented by a senior secured note, which had a term of 5 years and was secured by a forest licence with 200,000 cubic metres of annual cut held by a subsidiary of Conifex. Canfor had the option, exercisable after one year, to convert the loan into an ownership interest in the forest licence.
As a result of the exercise, Conifex will record a net gain of approximately CAD 29 million on the sale of assets, representing a gain of approximately CAD 1.37 per share, in the first quarter of 2016 in connection with the conversion, and will decrease its indebtedness by CAD 30 million.
Earlier Conifex Timber extended its credit line by CAD 10 million.
Conifex is a publicly listed softwood forest products company operating in the Northern Interior region of British Columbia, Canada. Its primary business is the manufacture of structural grade SPF dimension lumber. Conifex’s operations include timber harvesting, reforestation, forest management, sawmilling logs into lumber and wood chips, and value added lumber finishing. Conifex’s lumber products are sold in the United States, Chinese, Canadian and Japanese markets.
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