Business
Keweenaw Land Association enters into Definitive Agreement for Sale of Timber Assets
Keweenaw Land Association enters into Definitive Agreement for Sale of Timber Assets.
About this update from Keweenaw Land Association, Ltd.
[{"type":"text","content":"\n IRONWOOD, Mich., Nov. 23, 2021 (GLOBE NEWSWIRE) -- Keweenaw Land Association, Limited (OTC US: KEWL) today announced it has entered into a definitive agreement to sell its timber assets to an entity managed by a non-affiliated large institutional timberland investment manager in an all cash transaction. The transaction is expected to close by the end of 2021, subject to shareholder approval, completion of buyer’s inspection period, and other customary closing conditions. Keweenaw will retain ownership of 428,789 acres of subsurface mineral rights and will continue to trade as a public company while the board continues to explore the most efficient structure for its remaining assets. The company also announced that its board of directors approved a plan of partial liquidation in connection with the sale (“Plan of Partial Liquidation” or “Plan”). If the Plan of Partial Liquidation is approved, the net proceeds from the sale following the deduction of corporate taxes, other expenses related to the sale, cash retained for the ongoing business, and an indemnity holdback, will be distributed to the company's shareholders. We estimate this special distribution will equal approximately $100 per share, payable in two installments as follows: an initial distribution of approximately $92 per share payable on or before December 31, 2021, and a second distribution of approximately $8 per share payable on or before December 31, 2022. The second distribution is subject to potential reduction for indemnity claims or other contingencies. It is intended that the special distribution will be treated as a “redemption in partial liquidation of the Company” within the meaning of Section 302(b)(4) of the Internal Revenue Code. Each shareholder is urged to consult and rely on their own tax adviser with respect to the tax consequences of the special distribution. Notwithstanding the adoption of the Plan, the Company expects to continue operating as a going concern and a publicly traded company focused on maximizing the value of Keweenaw’s remaining assets, including its mineral rights. The Company will take steps immediately upon closing to substantially reduce its overhead costs; most notably by decreasing headcount, board size and professional service fees. Possible savings contemplated at this t...