TSX: WEF
DUNCAN, BC, June 8 /CNW/ - Western Forest Products Inc. ("Western" or the
"Company") announces that it will be taking down-time at certain operations
during the summer, and also deferring payment of 50% of the interest due on
its 15% secured bonds as it is permitted to do, in a measured response to
maintain liquidity.
Operations Down-Time
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In response to lower than expected sales and to reduce the amount of cash
tied up in log and lumber inventories the Company will be taking down-time at
both its logging and sawmilling operations over the summer. Logging operations
will be curtailed starting at various dates in July and all will be idle
through to the end of August. Critical road and bridge building programs may
continue throughout this period.
The Duke Point sawmill will take down-time from June 30 to August 2 to
coincide with the installation of new equipment. The Ladysmith sawmill will
take down-time from July 18 to August 15, the Saltair sawmill from July 4 to
August 2, and the Cowichan Bay sawmill from August 8 to September 2. The
Nanaimo sawmill will continue to operate on two shifts with the Silvertree
mill continuing on one shift.
"Taking this down-time should enable us to reduce our log and lumber
inventories by approximately $40-$50 million," says Reynold Hert, President
and Chief Executive Officer.
In addition to the above, the Company has rescheduled the annual Squamish
pulp mill maintenance shutdown to mid-August. This will allow the Company to
spread out the timing of significant cash expenditures.
US$221 Million Secured Bond Interest Deferral
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The Company will defer payment of 50% of the interest due on June 30 as
permitted under the terms of the bond indenture. The unpaid interest amounting
to approximately Canadian $10.3 million carries interest at 15% and can be
repaid at anytime during the bonds' life, and in any event no later than
July 28, 2009.
"Taking down-time is a difficult thing to do as it obviously affects the
livelihood of our employees and their families," says Hert. "However, we feel
these steps along with the deferral of 50% of the interest payment are prudent
measures that allow us to better manage and preserve our liquidity so that we
can continue to work on our long-term strategy of improving the overall
business fundamentals."
About Western:
Western is an integrated Canadian forest products company and the second
largest coastal woodland operator in British Columbia. Principal activities
conducted by Western and its subsidiaries include timber harvesting,
reforestation, sawmilling logs into lumber and wood chips, value-added
remanufacturing and producing NBSK pulp. Over 95% 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 and its products are sold in 30 countries
worldwide.
This press release contains statements that are forward-looking in
nature. Those statements appear in a number of places herein and include
statements regarding the intent, belief or current expectations of Western,
primarily with respect to market and general economic conditions, future
costs, expenditures, available harvest levels and future operating performance
of Western. Such statements may be indicated by words such as "estimate",
"expect", "intend", "believes" and similar words and phrases. Readers are
cautioned that any such forward-looking statements are not guarantees and may
involve known and unknown risks and uncertainties, and that actual results may
differ from those expressed or implied in the forward-looking statements as a
result of various factors, including general economic and business conditions,
product selling prices, raw material and operating costs, changes in
foreign-currency exchange rates, changes in government regulation,
fluctuations in demand and supply for Western's products, industry production
levels, the ability of Western to execute its business plan and misjudgements
in the course of preparing forward-looking statements. The information
contained under the "Risk Factors" section of Western's Annual Information
Form identifies important factors that could cause such differences. All
written and oral forward-looking statements 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 as conditions change.
