Western Forest Products Inc.
TSX : WEF

Western Forest Products Inc.

December 01, 2008 22:03 ET

Western Announces $50 Million Rights Offering

DUNCAN, BRITISH COLUMBIA--(Marketwire - Dec. 1, 2008) -

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Western Forest Products Inc. (TSX:WEF) ("Western" or "the Company") today announced a rights offering (the "Offering") whereby the Company will distribute rights ("Rights") which will entitle existing shareholders to purchase additional common shares, subject to regulatory requirements.

In connection with the Offering, the Company has entered into a Standby Purchase Agreement with Tricap Management Limited on behalf of Tricap Partners Ltd. (collectively "Tricap"), the Company's largest shareholder. Tricap has committed to purchase any common shares not otherwise subscribed for by rightholders under the Offering.

The Company expects to receive gross proceeds of $50 million. The net proceeds from the Offering will be used to reduce indebtedness under the Company's revolving credit line, thereby providing additional liquidity, and for general corporate purposes. The Offering is expected to close in early 2009.

"The proceeds from this offering will improve our financial flexibility as we continue to advance our business initiatives to address the difficult market conditions facing our company and the industry," said Dominic Gammiero, Western's President and CEO. "Tricap's support of the offering is a sign of their continued commitment to our business plan."

The Offering will be made pursuant to a prospectus, which is expected to be filed shortly. Rights will be issued to holders of record in British Columbia, Alberta, Saskatchewan, Manitoba and Ontario together with New York State and certain U.S. States in which the Rights can be qualified for issuance by filing the U.S. Securities and Exchange Commission Form F-7. Further details of the distribution of the Rights will be provided in the prospectus. This financing will substantially increase the number of Western's common shares and non-voting shares outstanding.

Under the terms of the Offering, shareholders of Western will receive Rights to subscribe for common shares of Western. The subscription price shall be determined at the time the final prospectus for the offering is filed. The subscription price for each common share will be fixed at 60% 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 greater than $0.25 per common share. The Rights will be transferable over the TSX and will be exercisable for 21 days following the date of mailing of the final prospectus. Shareholders that fully exercise their Rights will be entitled to subscribe for additional common shares, if available, that were not subscribed for by other Rights holders.

The Offering will be subject to regulatory approvals, including the approval of the TSX.

Forward Looking Statements and Information

This press release contains statements which constitute forward-looking statements and forward-looking information within the meaning of applicable securities laws. Those statements and information appear in a number of places in this document and include statements and information regarding our current intent, belief or expectations primarily with respect to market and general economic conditions, future costs, expenditures, available harvest levels and our future operating performance, objectives and strategies. Such statements and information may be indicated by words such as "estimate", "expect", "anticipate", "plan", "intend", "believe", "should", "may" and similar words and phrases. Readers are cautioned that it would be unreasonable to rely on any such forward-looking statements and information as creating any legal rights, and that the statements and information are not guarantees and may involve known and unknown risks and uncertainties, and that actual results and objectives and strategies may differ or change from those expressed or implied in the forward-looking statements or information as a result of various factors. Such risks and uncertainties include, among others: general economic conditions, competition and selling prices, changes in foreign currency exchange rates, labour disruptions, natural disasters, relations with First Nations groups, changes in laws, regulations or public policy, misjudgments in the course of preparing forward-looking statements or information, changes in opportunities and other factors referenced under the "Risk Factors" section in our Annual Information Form dated March 4, 2008, under the "Risks and Uncertainties" section of our MD&A in our 2007 Annual Report and those referenced in our MD&A in our most recently filed quarterly report. All written and oral forward-looking statements or information attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. Except as required by law, Western does not expect to update forward-looking statements or information as conditions change.

Western Forest Products

Western is an integrated Canadian forest products company and the largest coastal British Columbia woodland operator and lumber producer with an annual available harvest of approximately 7.5 million cubic metres of timber of which approximately 7.3 million cubic metres is from Crown lands and lumber capacity in excess of 1.5 billion board feet from eight sawmills and four remanufacturing plants. Principal activities conducted by the Company include timber harvesting, reforestation, sawmilling logs into lumber and wood chips and value-added remanufacturing. Substantially all of Western's operations, employees and corporate facilities are located in the coastal region of British Columbia while its products are sold in over 30 countries worldwide.

Contact Information

  • Western Forest Products Inc.
    Dominic Gammiero
    President & CEO
    (250) 715-2207
    or
    Western Forest Products Inc.
    Murray Johnston
    Vice President & CFO
    (250) 715-2209
    Website: www.westernforest.com