Business
Western Forest Products Takes Action to Manage Cash
Western Forest Products Takes Action to Manage Cash.
About this update from Western Forest Products Inc.
[{"type":"text","content":"\n\n\n\n\nTSX: WEF\n\nDUNCAN, BC, June 8 /CNW/ - Western Forest Products Inc. (\"Western\" or the\n\"Company\") announces that it will be taking down-time at certain operations\nduring the summer, and also deferring payment of 50% of the interest due on\nits 15% secured bonds as it is permitted to do, in a measured response to\nmaintain liquidity.\n\nOperations Down-Time\n--------------------\n\nIn response to lower than expected sales and to reduce the amount of cash\ntied up in log and lumber inventories the Company will be taking down-time at\nboth its logging and sawmilling operations over the summer. Logging operations\nwill be curtailed starting at various dates in July and all will be idle\nthrough to the end of August. Critical road and bridge building programs may\ncontinue throughout this period.\nThe Duke Point sawmill will take down-time from June 30 to August 2 to\ncoincide with the installation of new equipment. The Ladysmith sawmill will\ntake down-time from July 18 to August 15, the Saltair sawmill from July 4 to\nAugust 2, and the Cowichan Bay sawmill from August 8 to September 2. The\nNanaimo sawmill will continue to operate on two shifts with the Silvertree\nmill continuing on one shift.\n\"Taking this down-time should enable us to reduce our log and lumber\ninventories by approximately $40-$50 million,\" says Reynold Hert, President\nand Chief Executive Officer.\nIn addition to the above, the Company has rescheduled the annual Squamish\npulp mill maintenance shutdown to mid-August. This will allow the Company to\nspread out the timing of significant cash expenditures.\n\nUS$221 Million Secured Bond Interest Deferral\n---------------------------------------------\n\nThe Company will defer payment of 50% of the interest due on June 30 as\npermitted under the terms of the bond indenture. The unpaid interest amounting\nto approximately Canadian $10.3 million carries interest at 15% and can be\nrepaid at anytime during the bonds' life, and in any event no later than \nJuly 28, 2009.\n\"Taking down-time is a difficult thing to do as it obviously affects the\nlivelihood of our employees and their families,\" says Hert. \"However, we feel\nthese steps along with the deferral of 50% of the interest payment are prudent\nmeasures that allow us to better manage and preserve our liquidity so that we\ncan continue to work ...