TSX: WEF
DUNCAN, BC, March 9 /CNW/ - Western Forest Products Inc. (TSX: WEF) today
announced that it has completed its rights offering, which was announced on
November 10, 2005. A total of approximately 127 million subscription receipts
have been subscribed for by rightholders for proceeds of approximately
$210 million. The subscription receipts will be issued on March 16, 2006.
At the time of closing of the previously announced acquisition of
Cascadia Forest Products Inc. ("Cascadia"), each subscription receipt will be
automatically exchanged for one Western common share. The acquisition of
Cascadia is subject to regulatory review, including by the Canadian
Competition Bureau, and is currently expected to close by the end of this
month.
Pursuant to a standby purchase agreement with Western, Tricap Management
Limited ("Tricap") will subscribe for approximately 51 million common share
subscription receipts not otherwise purchased by rightholders under the rights
offering at a price of $1.65 per subscription receipt, which subscription is
expected to close on March 16, 2006. As such, a total of approximately
179 million subscription receipts will have been issued as of March 16, 2006
for aggregate proceeds of $295 million.
If the exchange of subscription receipts would result in a holder or
group of holders beneficially owning or controlling 50% or more of Western's
common shares, Western may, at its option, permit the exchange of that portion
of the subscription receipts owned by such holder(s) that would result in such
holder(s) beneficially owning or controlling 49% of the common shares. The
balance of the subscription receipts held by such holder(s) will remain
outstanding until Western has amended its articles to create a new class of
non-voting shares. Provided this amendment is approved by Western's common
shareholders, the subscription receipts held by such holder(s) will be
exchanged for non-voting shares.
Subscription funds will be refunded to investors if the Cascadia
acquisition does not close by May 10, 2006, or if either the Cascadia
acquisition agreement or the debt facilities arranged by Tricap are
terminated.
The net proceeds from the rights offering will be used to fund the
acquisition of Cascadia and to provide additional working capital.
THIS RELEASE DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES FOR SALE.
Western Forest Products
Western is an integrated Canadian forest products company and currently
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, and
value-added remanufacturing. 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 over 20 countries worldwide.
Following the completion of Western's previously announced acquisitions of
Cascadia Forest Products Ltd. and Tree Farm License 37, both of which are
subject to regulatory approval and expected to close in the first quarter of
2006, Western expects to be the largest Coastal woodland operator and lumber
producer with an AAC of approximately 7.7 million cubic meters and lumber
capacity in excess of 1.5 billion board feet. With the closure of Western's
Squamish pulp mill on March 9, 2006, Western has now exited the pulp business.
Cascadia Forest Products
Cascadia is a leading Canadian producer of high value, high quality wood
products harvested from sustainably managed forests in Coastal B.C. for
customers worldwide. The largest Crown tenure holder and one of the largest
lumber producers on the coast, Cascadia has an experienced workforce of
approximately 2,000 and offices in Japan, Australia and China focused on
producing predominantly appearance and specialty applications for customers
worldwide. The company is a wholly-owned subsidiary of Brookfield Asset
Management (NYSE/TSX:BAM), an asset management company focused on property,
power and infrastructure assets.
Forward Looking Statements
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", "anticipate", "plan", "intend", "believe", "will", "should", "may"
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 misjudgments in the course of preparing forward-
looking statements. The information contained under the "Risk Factors" section
of Western's Annual Information Form, under the "Risk Factors" section of
Western's Form 20-F/A and under the "Risk Factors" section of the prospectus
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.
