Cathay Forest Products Corp.
TSX VENTURE : CFZ

Cathay Forest Products Corp.

November 23, 2009 16:11 ET

Cathay Forest Announces $15.25 Million Bought Deal Financing

TORONTO, ONTARIO--(Marketwire - Nov. 23, 2009) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

Cathay Forest Products Corp. ("Cathay Forest" or the "Company") (TSX VENTURE:CFZ) is pleased to announce that it has entered into an agreement with Dundee Securities Corporation and Canaccord Capital Corporation, to include a syndicate of underwriters to be determined (collectively, the "Underwriters"), pursuant to which the Underwriters have agreed to purchase 25,000,000 common shares of the Company (the "Shares") on a bought deal basis, at a price of $0.61 per Share for aggregate gross proceeds of approximately $15.25 million. The Underwriters have been granted an over-allotment option, exercisable until 30 days after the closing of the offering, enabling them to purchase up to an additional 15% of the number of Shares sold pursuant to the offering at the issue price.

The net proceeds of the offering will be used primarily to fund the expansion of the Company's Russian activities, including the harvesting of a second plantation and to develop downstream processing operations in a manner that would allow the Company to become exempt from Russian export tax. The remainder will be used for general corporate purposes.

The offering is scheduled to close on or about December 15, 2009 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange.

These materials are not an offer for sale of securities in the United States. The securities have not been registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be sold in the United States absent registration or an exemption from registration under the Securities Act. The Corporation does not intend to register any part of the offering in the United States or to conduct a public offering of securities in the United States

About Cathay Forest

Cathay Forest is a forest products company that manages approximately 1,000,000 hectares of standing timber properties and fast-growth, high-yield poplar plantations in China and Russia. Cathay Forest is building a world-class forest products company through a customer base that includes the domestic Chinese pulp and paper industry and other wood products customers in the Japanese market.

Forward-Looking Statements

All statements, other than statements of historical fact, in this news release are forward-looking statements that involve various risks and uncertainties, including, without limitation, statements regarding the future plans and objectives of the Company. Actual results and future events could differ materially from those anticipated in such statements. Except as required by applicable securities laws, the Company assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • CATHAY FOREST PRODUCTS CORP.
    Anthony Ng
    Chief Executive Officer
    (416) 226-7269
    anthony.ng@cathayforest.com
    or
    CATHAY FOREST PRODUCTS CORP.
    Ermo Ou
    Vice President, Corporate Planning
    (416) 226-7269