TSX: WEF
VANCOUVER, Jan. 23 /CNW/ - Western Forest Products (TSX: WEF) today
announced that it has filed a preliminary prospectus in respect of its
proposed 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
will receive rights to subscribe for common share subscription receipts of
Western. 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 subscription price
shall be determined at the time the final prospectus for the offering is
filed. The subscription price for each common share subscription receipt will
be fixed at 85% of the volume weighted average trading price of the Western
common shares on the TSX for the 10 day period ending on the day prior to the
date of filing of the final prospectus, provided that the subscription price
will not be less than C$1.65 per common share subscription receipt nor greater
than C$2.75 per common share subscription receipt. The rights are expected to
be listed for trading on the TSX and will be exercisable for at least 21 days
following the date of mailing of the final prospectus.
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.
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, 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 over
25 countries worldwide.
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.
