Cathay Forest Products Corp.

Cathay Forest Products Corp.

June 01, 2012 15:23 ET

Cathay Forest Announces Directors Resignations, Termination of CFO, Hiring of Consultant and Provides Corporate Update

TORONTO, ONTARIO--(Marketwire - June 1, 2012) - Cathay Forest Products Corp. (Cathay Forest or the Company) (TSX VENTURE:CFZ) announces the resignation of Robert Beutel and John Housser from the Board of directors. The Board of directors will undertake a search for potential candidates to fill these vacancies and to review all the outstanding matters that had been occurred, leading to the suspension of the shares of the Company, and the delisting of the Company from the TSX Venture Exchange.

Cathay Forest also announces that it has terminated the employment of its Chief Financial Officer Luc Perron. A search for a new Chief Financial Officer is underway.

Cathay Forest has also engaged CIC Capital Management Limited (CIC)as a consultant to advise on the restructuring of the Company's affairs. Mr. Raymond Lo, the Managing Director of CIC, will be in charge of this mandate. Mr. Lo was a director of the Company from June 2008 until his resignation in March 2011 and also served as Chair of its Audit Committee till June of 2010, and subsequently as member of the Company's remuneration Committee. Mr. Lo is an experienced investment manager and corporate finance professional registered as an investment advisor with the Hong Kong Securities and Futures Commission. Mr. Lo holds a Bachelor of Business Administration from the University of Wisconsin and a Master of Law from University of Hong Kong, is a fellow of the Institute of Chartered Accountants of England and Wales, a corporate finance qualification from ICAEW and a member of the Institute of Chartered Accountants of Ontario. Cathay Forest has engaged CIC for a period of three month for an aggregate fee of $100,000.

The Board further wishes to state that we have advised the resigned directors of the pending class-action against the Company and reserve the Company's right to seek their assistance and information for the protection of shareholders' interest. We have not received further information from both resigned directors and confirmation that they do not have any disagreement with the Board nor that there is no other matter relating to their resignation which needs to be brought to the attention of the shareholders of the Company.

Corporate Update

Proposed Transaction with Russia Forest Products Group

Cathay Forest has encountered delays in its previously announced agreement with Russia Forest Products Group ("RFP"), a Russian based forestry company, respecting the acquisition of the Company's DalEuroLes LLC operations located in Far East Russia. The delays originate from a modification to the structure of the transaction at the request of RFP. RFP will now acquire all of the issued and outstanding share capital of DalEuroLes LLC from Cathay Forest and its two other minority shareholders. At this time Cathay Forest is in discussions with the minority shareholders in order to finalize this transaction but there can be no assurance that this transaction will proceed as contemplated or at all.

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 Cathay Forest. Actual results and future events could differ materially from those anticipated in such statements. Except as required under applicable securities laws, Cathay Forest 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 policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information