TSX: WEF
DUNCAN, BC, March 8 /CNW/ - Western Forest Products Inc. (TSX: WEF) today announced that it has renegotiated the terms of its U.S. dollar denominated long-term debt with the Brookfield Bridge Lending Group. Principal changes to the terms include:
- Interest rate reduced from floating one-month LIBOR + 8.15% to
floating one-month LIBOR plus 3%
- Annual fees of 0.75% (1% in final year) eliminated
- U.S. dollar denominated debt reduced from U.S.$95.3 million to U.S.
$73.7 million through a payment of U.S.$21.6 million from the
Company's cash reserves
The U.S. debt matures on March 10, 2010 and may be fully or partly prepaid at anytime without penalty. In addition to the U.S. debt, at December 31, 2006 the Company had outstanding Cdn$99.9 million of Canadian dollar denominated debt that will mature on March 10, 2008. The Canadian debt bears interest at floating CIBC Prime plus 5.25%.
Commenting on the revised terms, Reynold Hert, President and CEO stated, "The combination of lowering the U.S. debt, reducing the interest rate and the other amendments will together save the Company approximately $7.0 million annually in interest costs and is an important next stage in our efforts to refinance the Company's balance sheet and reduce our cost of capital."
Western Forest Products
Western is an integrated Canadian forest products company and the largest coastal British Columbia woodland operator and lumber producer with an Annual Allowable Cut of approximately 7.7 million cubic meters of timber (before temporary AAC reductions and reductions with respect to the removal of certain private timberlands from Tree Farm Licences) and lumber capacity in excess of 1.5 billion board feet from eight sawmills and four remanufacturing plants. Principal activities conducted by the Company and its subsidiaries include timber harvesting, reforestation, sawmilling logs into lumber and wood chips, and value-added remanufacturing. Substantially all of Western's logging is conducted on government owned timberlands in British Columbia. All of Western's operations, employees and corporate facilities are located in the coastal region of British Columbia while its products are sold in over 20 countries worldwide.
Forward Looking Statements and Information
This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities law. Those statements and information include statements or information regarding the intent, belief or current expectations of Western with respect to the refinancing of its balance sheet. Such statements or information may be indicated by words such as "should", "will", "may" and similar words and phrases. Readers are cautioned that any such forward-looking statements or information are not guarantees and may involve known and unknown risks and uncertainties, and that the actual results may differ from those expressed or implied in the forward-looking statements or information as a result of various factors including, changes in government regulation, and misjudgments in the course of preparing forward-looking statements or information. The information contained under the "Risk Factors" section of Western's Annual Information Form and under the "Risks and Uncertainties" section of Western's Management's Discussion and Analysis identifies important factors that could cause such differences. All written and oral forward-looking statements or information attributable to Western or persons acting on behalf of Western are expressly qualified in their entirety by the foregoing cautionary statements. Western does not expect to update forward-looking statements or information as conditions change.