VANCOUVER, Feb. 3 /CNW/ - Western Forest Products (TSX: WEF) today
announced that it has filed a final prospectus in respect of its rights
offering, which was announced on November 10, 2005.
Western intends to raise a total of C$295 million of equity by way of a
rights offering to all shareholders. Rights will be issued to holders of
record in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and
QuDebec together with certain U.S. States. Further details of the distribution
of the rights are provided in the prospectus. This financing will
substantially increase the number of Western's common shares outstanding from
the current number of 25.6 million common shares.
Under the terms of the rights offering, common shareholders of Western of
record as of the close of business (Toronto time) on February 13, 2006 will
receive one right for each common share held. Each right will allow the holder
to subscribe for 6.975 subscription receipts at a price of $1.65 per
subscription receipt on or before 4:00 p.m. (Toronto time) on March 9, 2006.
Rights not exercised on or before 4:00 p.m. (Toronto time) on March 9, 2006
will be void and have no value.
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.
Tricap Management Limited ("Tricap") has committed to purchase any common
share subscription receipts not otherwise purchased by rightholders under the
rights offering. In addition, Tricap has been granted an option, which may be
exercised for up to 10 business days following the completion of the rights
offering, to acquire additional common share subscription receipts at the same
issue price as under the rights offering in order to ensure that Tricap owns,
or exercises control or direction over, 45% of the Western common shares after
giving effect to the rights offering.
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 (plus the proceeds of the
subscription receipts issued pursuant to Tricap's option, if any) will be used
to fund the acquisition of Cascadia and to provide additional working capital.
Western has retained Georgeson Shareholder Communications Inc. to act as
Information Agent with respect to the Rights Offering. For further information
relating to the Rights Offering, please contact Georgeson Shareholder
Communications Inc., toll-free, at 1-866-311-0848.
THIS RELEASE DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES FOR SALE.
Western Forest Products
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 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 25 countries worldwide. As previously
announced, the Company has decided to exit the pulp business, with the final
pulp production run at its Squamish pulp mill on January 26, 2006 and closure
of the mill scheduled for March 9, 2006.
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 over
2,000 and offices in Japan, Australia and China focused on producing
predominantly appearance and specialty applications for customers worldwide.
The company is wholly owned by Trilon Bancorp Inc., a wholly-owned subsidiary
of Brookfield Asset Management (formerly Brascan Corporation) (NYSE/TSX: BAM),
a global 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.
