PRT Forest Regeneration Income Fund

PRT Forest Regeneration Income Fund

February 03, 2010 15:53 ET

PRT Announces Receipt of Insurance Cash Settlement

VICTORIA, BRITISH COLUMBIA--(Marketwire - Feb. 3, 2010) - PRT Forest Regeneration Income Fund (the "Fund") (TSX:PRT) today announced receipt of $4.6 million in insurance proceeds as cash settlement for damages to greenhouses resulting from an unusually heavy snowfall in December 2008, as previously reported by the Fund.

The greenhouse losses occurred in the lower mainland of BC, with the majority at PRT's Maple Ridge nursery which was permanently closed in 2009. The settlement amount is expected to exceed the underlying book values of the damaged assets, and the resulting gain for accounting purposes, once determined, will be netted with other gains or losses arising from the nursery closure, and reported in the December 31, 2009 consolidated financial statements of the Fund.

The Fund is currently in discussion with its lenders regarding disposition of the settlement receipt in accordance with the current credit agreements in place with the lender.

Commenting on the insurance settlement receipt, President and CEO, Rob Miller, said, "Receipt of this settlement allows PRT to reduce bank debt, debt service costs, and further strengthen the balance sheet. This positions the company well in the current forest seedling industry downturn, which is not expected to show improvement before 2011. PRT has sufficient greenhouse capacity for the mid-term to accommodate the expected increase in demand as the forest industry recovers. In addition, the company has a strategy to add future capacity as needed with lower capital cost outdoor growing compounds and expanded use of our mini-plug transplanting technology. With limited capital spending needs in the near term, this makes debt reduction the most attractive option for these funds."

About the Fund
PRT is the largest producer of container grown forest seedlings in North America, with 13 nursery locations expected to produce approximately 120 million seedlings in 2010. Units of the Fund are listed for trading on the Toronto Stock Exchange under the trading symbol PRT.UN.

Forward Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements relate to, among other things, expectations for future order volumes, industry demand, capacity needs and capital expenditures; the outlook for the forest industry; plans and opportunities for capacity expansion; and other statements contained in this discussion that are not historical fact. Words such as "anticipate", "expect", "potential", "intends", "opportunity", "believes", "may", "will" and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are based on management's current expectations and beliefs and actual events or results may differ materially. Risks and uncertainties include, but are not limited to, agricultural risks and crop yields, future commodity prices, exchange rate risks, customer credit risks and customer insolvency, liquidity risks, the ability of PRT to comply with its debt covenants, the outlook for the forest industry, the impact of proposed changes to income trust taxation, and other risks identified from time to time in the Fund's annual report, annual information return, prospectus, and other filing documents. These documents are available in electronic form at, or by contacting the Fund directly. Forward-looking statements are based on current expectations and the Company assumes no obligation to update such information to reflect later events or developments, except as required by law. Readers are cautioned not to place undue reliance on forward looking statements.

Contact Information

  • PRT Forest Regeneration Income Fund
    Tony Pollard
    VP Finance/CFO
    (866) 553-8733 ext. 229